ALIBABA’S CONVENIENCE STORES ARE GOING UNDERGROUND

Lightning warehouses (LWs) are ‘dark stores’ for instant retail (quick commerce), run by independent retailers (who often operate multiple LWs). They are closed to the public and often fulfil online orders from basements and other storage spaces hidden in residential areas. (linkedin.com/posts/edsa…)

Meituan launched the concept in 2020. It allowed the company to quickly offer instant retail with thousands of SKUs in cooperation with the LW operators. By mid-2025, Meituan was said to work with 50.000 such warehouses and aims to reach 100.000 in 2027.

Meituan also launched its self-operated LW brand, Squirrel Convenience Store (linkedin.com/posts/edsa…), and even brands like Miniso launched a network of their own LWs (linkedin.com/posts/edsa…).

More recently, news broke that Alibaba has also begun opening LWs as part of its Taobao Instant Commerce initiatives: the Taobao Convenience Store. Lianshang recently shared some details:

▶️ They use Alibaba's ecosystem supply chain to provide consumers with a "complete, 24-hour operation, and 30-minute delivery" shopping experience. Service radius: 3-5 kilometres.

▶️ Taobao does not operate its own stores but instead licenses brands to qualified, high-quality merchants. The store assets remain with the merchants, who provide services in accordance with the platform's standardised management (including product structure, warehouse management, and delivery time).

▶️ 10.000 SKUs, three times the product range of ordinary convenience stores. In addition to standard beverages, snacks, and cleaning products, they also introduce non-essential categories such as apparel, cosmetics, outdoor gear, and baby products, extending instant retail from "emergency consumption" to "daily consumption." Taobao supports merchants in selecting products locally based on regional needs.

▶️ Taobao plans to invest RMB 2 billion over the next year in dedicated funds to support the construction of LWs, product upgrades, logistics capacity building, and digital capability iteration.

▶️ For individual stores, the platform offers monthly warehousing subsidies of up to RMB 30K yuan and supply chain finance credit lines of up to RMB 5 million.

▶️ Merchants can access digital supply chain support jointly provided by Taobao and 1688 (Alibaba’s wholesale platform), with payment terms up to 98 days, greatly alleviating the financial pressure on small and medium-sized businesses.

About 10 years ago, Alibaba started a licensing program for ‘Tmall convenience stores’. Now they follow the trend into instant retail’s lightning warehouses, and the stores disappear into basements.

-Ed