<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/b314f138-058d-45d2-acf8-20d635be2c86.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/b314f138-058d-45d2-acf8-20d635be2c86.jpeg"/> Author | Wang Xiaojun
Editor | Huang Yu
The battle of instant retail has escalated with the moves made by various players.
On June 23, the defending player Meituan released a major announcement, officially expanding its instant retail business, with Xiao Xiang Supermarket set to cover all first and second-tier cities.
At the same time, on June 23 around noon, many users discovered that Meituan Youxuan's services had already been taken offline in dozens of provinces and cities, including Henan, Shandong, and Shanghai. The previous ordering interface displayed, &#34;Due to partial business adjustments, your area will suspend order-taking from June 23.&#34;
According to inquiries from Wall Street News, currently only Guangdong and Zhejiang provinces can use Meituan Youxuan.
While Meituan was making adjustments, Alibaba integrated Ele.me and Fliggy into Taotian, and Pinduoduo, which had been observing from the sidelines, also announced plans to join the instant retail sector. Coupled with JD.com, which has been actively engaged, the instant retail market has officially entered a four-way melee.
With this round of melee, the logic of the e-commerce retail industry may be reshaped. &#34;30-minute delivery for everything&#34; may become the new infrastructure, with standardized products further delivered to consumers through instant retail, while traditional e-commerce platforms may be left with more non-standard products and long-tail demands, and the boundaries between the two will become increasingly blurred.
<h2>Meituan Doubles Down on Instant Retail</h2>
In this wave of operations, Meituan is primarily retreating from community group buying centered around Meituan Youxuan and significantly expanding its instant retail through Xiao Xiang Supermarket. Behind this change is Meituan's further pursuit of delivery efficiency in grocery retail, primarily focused on fresh produce.
At the same time, the shutdown of Meituan Youxuan's services in certain regions is also a consideration of operational efficiency.
In an internal notice, Meituan stated, &#34;After research and discussion by the grocery retail management team, Meituan Youxuan has decided to undergo a strategic transformation and upgrade, continuing to explore the 'next-day delivery + self-pickup' model and new community retail formats, while exiting some loss-making areas.&#34;
In recent years, the new business where Meituan Youxuan operates has shown continuous losses. According to Meituan's 2024 financial report, although the losses from Meituan Youxuan's business have narrowed, the operational losses of its new business still amount to 7.3 billion yuan.
It is worth mentioning that Meituan's new business has been continuously losing money, with Meituan Youxuan being the &#34;culprit.&#34; Meituan's financial report shows that in the third quarter of 2024, Meituan's new business achieved overall profitability for the first time, excluding Youxuan, with operational losses narrowing by 79.9% to 1 billion yuan year-on-year.
Compared to the continuous losses of Meituan Youxuan, although Xiao Xiang Supermarket has not explicitly reported profitability, recent market news indicates that its GMV has approached 30 billion yuan, and due to its higher unit price and average transaction value, it is considered to have greater profit potential.
By retreating from Meituan Youxuan and doubling down on Xiao Xiang Supermarket, Meituan faces the challenge of user attrition while improving delivery efficiency.
According to Wall Street News, because Xiao Xiang Supermarket is more expensive, consumers who do not have access to Meituan Youxuan may turn to group buying platforms like Duoduo Maicai instead of necessarily choosing Xiao Xiang Supermarket
Qi Heng (pseudonym) is a long-time user of Meituan Youxuan and Xiaoxiang Supermarket. He told Wall Street News that he previously lived in a provincial capital city in central China, where he would prioritize using Meituan Youxuan for grocery needs during the years he needed to stock up on vegetables. It offered good value for money, and it was convenient to pick up after work, as long as he planned ahead the night before.
After moving to Beijing, where Meituan Youxuan is not available, he started using Duoduo Maicai. Later, he saw that Meituan Grocery upgraded to Xiaoxiang Supermarket and began trying it out due to new user promotions. He often buys bottled drinking water there, which is cheaper than convenience stores, and occasionally buys vegetables, but he found that the overall prices at Xiaoxiang Supermarket are significantly higher than those at Meituan Youxuan. However, since he cooks less frequently now, only on weekends, he buys from Xiaoxiang Supermarket, but if he were to cook more often, he would still choose cheaper options.
In his view, for instant delivery of beverages, snacks, and bread, he compares Xiaoxiang Supermarket with Hema, but for vegetables and smaller items, he might use Duoduo Maicai and Meituan Youxuan and other group buying platforms. He believes that the market Meituan Youxuan has given up will likely be mostly taken over by Duoduo Maicai.
&#34;If there were no Meituan Youxuan, I would probably look at Duoduo Maicai. If I don't want to go out for groceries, I would choose Xiaoxiang Supermarket, but generally, I use it quite rarely.&#34; Another consumer living in a second-tier city expressed a similar viewpoint.
This means that as Xiaoxiang Supermarket expands into more cities, it faces pressure to attract users.
Four-way Battle Reshaping E-commerce Logic
However, finding more retail increments through forms outside traditional e-commerce has always been a direction Meituan has explored. Now, the density of its rider network and flash warehouses has become its moat in this round of instant retail warfare.
As it moves towards higher efficiency, Meituan continues to challenge traditional e-commerce platforms. Meituan's official WeChat account stated that Meituan Flash Purchase plans to collaborate with nearly one million physical stores to transform the consumer shopping experience from &#34;waiting for delivery&#34; to &#34;30-minute delivery.&#34; From this logic, the entire e-commerce industry is set to undergo a new round of restructuring. This also means that instant retail will further stand alongside traditional express e-commerce.
Previously, JD.com occupied the mindshare in the 3C sector with faster logistics and self-operated quality. Now, Meituan is collaborating with retail brands to build over 30,000 flash warehouses nationwide and has partnered with home appliance brands like Midea and Haier to establish a &#34;same-day delivery and installation&#34; service system, further reducing the reliance of standard products like home appliances on traditional express e-commerce platforms.
In the recently concluded 618 shopping festival, Meituan participated for the first time in this e-commerce world carnival and achieved good results, which strengthened Meituan's determination to further advance into instant retail.
Data shows that from May 27 to June 18, the number of users placing orders on Meituan Flash Purchase exceeded 100 million, with the average spending per user increasing by nearly 40%. Compared to the same period last year, the transaction volume of over 60 categories of goods on Meituan Flash Purchase grew more than double, and the overall transaction volume of over 20 high-priced &#34;large items&#34; doubled, with nearly 850 retail brands seeing their transaction volume double
Meituan's aggressive push in instant retail has prompted various e-commerce platforms to adjust their instant retail businesses. On the same day that Meituan announced the expansion of its instant retail business and the shutdown of its Meituan Preferred services in certain regions, Alibaba announced the integration of Ele.me and Fliggy into Taotian, which further affirms Alibaba's recognition of the restructuring of e-commerce through instant retail.
Prior to Alibaba's move, JD.com first boosted its platform's DAU through food delivery-focused instant retail and then entered the liquor and travel sectors. In the words of JD.com founder Liu Qiangdong, it is about raising a big flag around the supply chain. Meanwhile, Pinduoduo, which was absent from this year's food delivery battle, has recently been reported to begin piloting instant retail. The entry of new players will undoubtedly accelerate the transformation of instant retail in traditional e-commerce.
In the long run, the boundaries between instant retail and traditional online retail e-commerce will become increasingly blurred with the relentless pursuit of speed, pointing to Alibaba CEO Eddie Wu's statement about &#34;transforming into a large consumer platform.&#34;
In the future, &#34;30-minute delivery for everything&#34; may become a basic infrastructure, and the ultimate outcome of the retail industry is not about who replaces whom. Each company is likely to coexist long-term, leveraging its own advantages to complement each other. Standardized products may enter instant retail primarily based on local warehouses, while non-standardized products and more long-tail items will still rely on supply from e-commerce

Meituan will announce its first quarter 2025 results after the Hong Kong stock market closes on May 26. According to analysts' expectations, Meituan's revenue in Q1 2025 is expected to increase by 17% year-on-year to 85.44 billion yuan; adjusted net profit is expected to increase by 30% year-on-year to 9.73 billion yuan; net earnings per share are expected to be 1.39 yuan, a year-on-year increase of 61%.

Recently, a total of 40 analysts have rated Meituan-W, of which 38 analysts have given a "buy" rating or above, with an average target price of HK$199.15.

Meituan will announce its first quarter 2025 results after the Hong Kong stock market closes on May 26. According to analysts' expectations, Meituan's revenue in Q1 2025 is expected to increase by 17% year-on-year to 85.44 billion yuan; adjusted net profit is expected to increase by 30% year-on-year to 9.73 billion yuan; net earnings per share are expected to be 1.39 yuan, a year-on-year increase of 61%. Recently, a total of 40 analysts have rated Meituan-W, of which 38 analysts have given a "buy" rating or above, with an average target price of HK$199.15.

Meituan earnings , understand it at a glance!

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"30-minute delivery of everything" may become a new infrastructure

- The competition in instant retail has intensified, with Meituan announcing an expansion of its instant retail business while discontinuing its Meituan Preferred service in several regions.  
- This shift reflects Meituan's focus on improving delivery efficiency and adapting to market demands, as it faces challenges from competitors like Alibaba and Pinduoduo.  
- The evolving landscape suggests that instant retail may redefine e-commerce dynamics, with a potential blurring of lines between traditional and instant retail models.

Meituan Youxuan retreats, Xiaoxiang Supermarket moves forward