WHAT TWO CHARTS REVEAL ABOUT CHINA'S INSTANT RETAIL

Instant retail (sometimes also called quick commerce) refers to the delivery of products within 60 minutes from stores and warehouses, usually within 5 km of the consumer.

I have been following the instant retail market in China for 10 years and have often written about it for Tech Buzz China. However, I always found it difficult to get a clear picture of the size of all the players because it has several different business models (front-end warehouses, marketplaces, store + warehouse) and many different players who sometimes run multiple formats.

Take Meituan, for instance. It has a marketplace (Shangou) and a front-end warehouse (Xiao Xiang, formerly Meituan Maicai). Alibaba has a store and warehouse (Hema) but also offers instant retail through Eleme.

Recently, Zouma Finance published its analysis on the instant retail market. I combined all of their data in the line chart below. I also translated their pie chart of the market shares.

Here are a few things that stand out:

▶️The Others category in the pie chart includes JD's 7Fresh and a few smaller players that do instant retail (Walmart excluding Sam’s Club, Yonghui, etc).

▶️Combined, the marketplaces form the biggest format, followed by store + warehouse. Self-operated front-end warehouses are third and relatively small compared to other formats.

▶️ JD Daojiao (now 'JD Miaosong') used to be the market leader, but lost it to Meituan during the Covid years. I didn’t realise it was this dramatic, and it explains why JD is going all-in for meal delivery since February. To be able to compete, they need to urgently increase their merchant and courier density for instant retail.

▶️Meituan’s Shangou (‘Instashopping’) has 39.8% market share, but if we add Meituan’s 5.9% in the front-end warehouse format (Xiao Xiang), it’s share in instant retail is almost half of the market. And it is growing the number of ‘lightning warehouses’ (dark stores run by merchants) enormously fast and also opening Xiao Xiang community stores.

▶️Meanwhile, Alibaba’s Eleme + Hema has a combined 15,3% market share, just slightly more than JD’s 13,8%, and if we add 7Fresh, it might not be much bigger than JD.

▶️In China, some industry experts don’t see instant retail as something ‘on top of’ traditional e-commerce but as a digitisation of local retail, which will largely replace traditional retail. When local warehouses get automated, the efficiency will significantly improve, and instant retail is expected to explode. Instant retail is expected to be cheaper, faster and have a better assortment. This would be an enormous threat to traditional e-commerce. That’s why JD and Alibaba are seeing the threat of Meituan’s large market share and are now doubling down on instant retail.

Instant retail will be an important topic during our October ChinaTechTrip (chinatechtrip.com) tour with K5 - Future Retail and the 2026 tours we are developing.

- Ed