There has been much talk in recent days about the launch of Taobao Instashopping/Flash Shopping.

A few thoughts ...

▶️ As you can see in my LinkedIn post of 9 months ago (lnkd.in/edkknh-C), the service, which offers home delivery from local stores, is not really new. It has just been positioned more prominently.

▶️ It now uses the same name (闪购, Shangou) as Meituan's comparable service.

▶️ Besides Meituan, other players in the market are JD (JD Daojia/Miao Song) and even Douyin, the Chinese sibling of TikTok.

▶️ The market is heating up now that JD has entered the food delivery business. As I described in a recent Tech Buzz China, JD's moves into food delivery have little to do with their interest in this space (they have actually been doing food delivery for a while) and everything to do with their market share in instant retail, which they are losing to Meituan. With food delivery, they hope to increase their courier density, which can then also be used for instant retail of non-food.

▶️ The instant retail space, which has been active in China for more than 10 years, is heating up at the moment. The reason: the growth of instant retail will be partially at the expense of traditional e-commerce from warehouses. Without a good instant retail infrastructure, JD and Alibaba would lose more market share. There are even experts in the Chinese market who believe instant retail will almost completely replace e-commerce that delivers in 1-3 days, especially when local (lightning) warehouses get automated and the ROI increases explosively. Autonomous delivery carts and drones are also expected to improve the sector's profitability.

Finally, I recently read a post claiming that Alibaba was already 'on top of' this sector because it had 10 million daily orders. Two things about that:

▶️ This is nonsense because Meituan has 18 million daily instant retail orders.

▶️ If you subsidise heavily enough (as JD also does with food delivery), it's easy to get that many daily orders. But it says little about your chances of gaining a sustainable position in the market.

-Ed