Instant Retail: New Battleground for Chinese e-commerce platforms?

In China’s fast-paced lifestyle, consumers are demanding more immediacy and convenience from their shopping experiences. With just a few taps on their phones, they want products delivered within the hour.

This growing trend has led to the rise of instant retail, a retail model where products are ordered online and delivered to consumers in as little as 30 minutes.

According to the 2023 Instant+ Retail Development Trend White Paper, the instant retail market is expected to grow at an annual compound rate of 25% between 2023 and 2030, reaching an estimated value of RMB 3.6 trillion by the end of the decade. This figure would represent approximately 6% of China’s total retail sales.

But what exactly is instant retail? At its core, it’s an extension of food delivery, with platforms like JD Seconds Delivery, Hema, Dingdong Maicai, and Meituan Flash Sale moving beyond just food to include categories such as fresh produce, digital gadgets, pharmaceuticals, and daily necessities.

The development of instant retail has been driven by e-commerce giants like JD.com and Meituan, both of which have invested heavily in building local logistics systems, including front-end warehouses and last-mile delivery networks.

Platforms like JD’s have evolved from standard e-commerce models into what founder Liu Qiangdong calls “boundaryless retail,” serving customers across all time zones, categories, and platforms.

Meituan, known for its food delivery services, has similarly expanded into delivering everything from groceries to electronics.

Meanwhile, platforms such as Ele.me, acquired by Alibaba in 2018, are doubling down on instant retail by partnering with over 100 retail brands to drive 100% growth over the next two years.

As these platforms pour resources into logistics and local infrastructure, the race for dominance in the instant retail space is heating up.

Why Instant Retail?

Instant retail is more than just a new trend; it is emerging as a vital area for growth in a competitive e-commerce market.

One key reason for this shift is profitability. Traditional fresh food delivery platforms faced significant financial losses due to high perishability and low profit margins.

In contrast, instant retail offers a broader range of products, including non-perishable goods, allowing for better profit margins.

Additionally, the development of logistics infrastructure and the rising consumer demand for speed have made instant retail viable. Consumers today expect more immediate access to products, whether it’s groceries, electronics, or even healthcare supplies.

A report from Accenture revealed that more than 50% of Gen Z shoppers want same-day delivery and are willing to pay extra for faster service.

The Chinese government has also actively promoted the development of “30-minute living circles,” pushing for more accessible community retail services. This policy framework has fueled the growth of instant retail, helping businesses meet the increasing demand for real-time shopping experiences.