When Retail Hits the Fast-Forward Button: The Speed, the Battle, and the Future of Instant Retail

Greater China
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August 28, 2025

I. What is Instant Retail?

In a world where shopping at brick-and-mortar stores and buying from e-commerce platforms have already become routine, why has instant retail suddenly attracted massive investments from leading companies? To answer this, we first need to clarify what it is.

Instant retail is a new retail model defined by online instant ordering and offline rapid fulfillment. It relies on local stores, front warehouses, and delivery networks. Once a customer places an order through an app, the system allocates it to the nearest store or warehouse, and a courier completes the “last three kilometers” of delivery. The entire process usually takes 30 minutes to one hour.

Source: Poseidon

Several everyday scenarios illustrate how it works:

  • Morning: A white-collar worker on the way to the office realizes they’ve run out of milk. They place an order on Meituan Flash Buy, and within 20 minutes, a     courier delivers it to their door.
  • Midday: Office colleagues spontaneously decide to order barbecue via Ele.me, and steaming hot dishes arrive within half an hour.
  • Evening: A child suddenly develops a fever. Parents purchase fever medicine on JD Daojia, and it arrives at their home within 40 minutes.
  • Night: A shopper sees an imported snack on a Douyin livestream, places an order, and the nearest convenience store immediately dispatches it—delivered in     under 15 minutes.

These examples show that instant retail is not simply “faster e-commerce.” It is a structural shift in shopping habits, compressing waiting times from “days” to “minutes” and enabling consumers to resolve urgent or spontaneous needs at any time.

II. Industry Evolution

The rise of instant retail is not accidental; it is the natural outcome of retail innovation and evolving consumer demand. Its development can be divided into several stages:

  1. Germination Stage (Before 2010): Traditional offline retail and e-commerce dominated the market, but both had limitations—store hours were restricted, and e-commerce deliveries were slow. Some convenience stores experimented with extended hours and home delivery, but due to weak logistics and digitalization, coverage remained limited.
  2. Exploration Stage (2010–2015): The rapid spread of smartphones and mobile internet made “anytime shopping” feasible. Food delivery platforms like Meituan and Ele.me rose quickly in China, creating the first generation of instant delivery networks. In 2013, Amazon launched Prime Now in the U.S., promising one-hour delivery for certain goods, marking the beginning of global experimentation.
  3. Rapid Growth Stage (2015–2020): Advances in technology, improved logistics, and shifting consumer habits accelerated the sector. In 2015, Meituan Flash Buy launched, expanding beyond meals into multi-category delivery. In 2016, Freshippo (Hema) introduced its “store-warehouse hybrid” model, integrating online and offline channels for groceries and household goods. By 2018, JD Daojia partnered with local retailers to cover fresh produce, daily necessities, and pharmaceuticals.
  4. Boom Stage (2020–Present): The COVID-19 pandemic became the strongest catalyst. With people reducing outdoor activities, demand for instant delivery of groceries and medicine surged. Platforms expanded their coverage and enhanced delivery capabilities. From 2021 onward, technologies like big data, artificial intelligence, and IoT have been widely applied, further improving efficiency. By 2022, heavy capital inflows intensified competition, making service quality and user experience decisive factors.

Overall, instant retail has been shaped by the intersection of consumer demand, technological maturity, and capital investment.

Source: Poseidon

III. Instant Retail vs. Traditional Retail and E-commerce

To better understand instant retail, it is useful to compare it with traditional retail models.

  • Traditional Retail: Centered around physical stores. Consumers must visit in person, which allows for direct product interaction but limits choice and is constrained by store hours and geography. For example, buying medicine late at night may be impossible if pharmacies are closed.
  • Traditional E-Commerce: Powered by large warehouses and courier networks. It offers vast product variety and transparent pricing but usually requires 1–2 days for delivery. This model works well for non-urgent, lower-frequency purchases like apparel or home appliances.
  • Instant Retail: Combines online ordering with offline rapid fulfillment, emphasizing immediacy and convenience. Orders are sourced from local stores or front warehouses within 3–5 kilometers and delivered by couriers. The supply chain is closer to the consumer, and delivery time shrinks from “days” to “hours” or even “minutes.” It now covers not only food but also medicine, cosmetics, and flowers.
Source: Poseidon

In short, e-commerce solved the problem of “I can buy anything,” while instant retail addresses “I need it now.”

 

IV. Market Size and Future Projections

Instant retail is currently in a phase of rapid expansion. According to industry data, the market size was only RMB 68.7 billion in2018 but surged to RMB 650 billion in 2023, representing a 9.46-foldincrease in five years and a compound annual growth rate (CAGR) of over 56%.Projections estimate that the sector will reach RMB 780 billion in 2024and surpass RMB 1 trillion by 2025. Its share of overall online retail has also grown from less than 1% in 2018 to 4.2% in 2023.

User adoption has accelerated alongside this growth. In2023, China had 1.092 billion internet users, of which 580 million were active instant retail users, up 34. 9% year-on-year, representing 53.1% of all netizens. This indicates that nearly half of potential consumers remain untapped.

Looking at the broader local retail market, which totaled around RMB 35 trillion in 2024, instant retail penetration is still less than 2.5%. This means the long-term market potential could reach several tens of trillions of RMB. In other words, the current RMB 650 billion scale is only the appetizer—the real “main course” lies ahead.

 

V. Driving Forces

Why are giants like Alibaba, JD.com, and Meituan all betting heavily on instant retail? The answer lies in multiple growth drivers converging.

1. Shifts in Consumer Behavior: The pandemic made consumers accustomed to ordering groceries and medicine online. Even after restrictions eased, the convenience and sense of security remained part of daily routines.

2. Digitalization of Local Commerce: Pharmacies, convenience stores, and supermarkets have been rapidly digitizing and joining platforms. For example, in 2023 Meituan partnered with over 300,000 pharmacies across China, greatly strengthening the supply side.

3. New Growth Opportunities Beyond E-Commerce: Traditional e-commerce traffic growth has slowed, and customer acquisition costs continue to rise. Instant retail, however, creates new consumption scenarios and time windows:

  • Late-night snacks and alcohol,
  • Early-morning coffee and breakfast,
  • Emergency needs like medicine and flowers.
    These high-frequency, time-sensitive purchases are areas where traditional e-commerce struggles to compete.

4. Advances in Technology and Supply Chains
AI-driven forecasting and dispatching make operations more efficient. For example, during rainy days, systems automatically anticipate higher demand for instant noodles and hot drinks, adjusting inventory accordingly. In Shenzhen, drone delivery networks are already in place, with 25 aerial routes completing more than 220,000 orders to date.

5. Strategic Competition
Instant retail has become a battleground for major platforms. If Alibaba does not invest, it risks losing share to Meituan; if Meituan does not expand into retail, it risks losing ground to Douyin; if JD.com does not participate, it risks ceding the space entirely. As a result, Alibaba announced plans to invest RMB 50 billion annually for the next three years, a clear example of both defensive and offensive strategy.

 

VI. Global Landscape

China: The World’s Most Dynamic Market

China is the fastest-growing and largest instant retail market globally, thanks to three key advantages:

  • High population density in major cities makes last-mile delivery efficient.
  • Ubiquitous mobile payments (WeChat Pay, Alipay) lower barriers for online consumption.
  • Mature courier networks, with millions of Meituan and Ele.me riders, provide reliable delivery capacity.

Market structure highlights:

  • Meituan Flash Buy is the clear leader, with 2023 orders up 40% year-on-year and gross merchandise volume (GMV) surpassing RMB 400 billion. By 2025, it is projected to hold nearly 40% of the market.
  • JD Daojia leverages JD.com’s supply chain and partnerships with Walmart and Yonghui, focusing on household procurement.
  • Ele.me has smaller share but continues to expand from food delivery into convenience retail.
  • Douyin and Xiaohongshu are entering via livestream commerce, promoting a “watch and buy, delivered immediately” model.

Regional trends:

  • Eastern coastal cities (Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou) have penetration rates above 65%, already reaching maturity.
  • Central and western regions are expanding quickly, and county-level markets are emerging as new frontiers. In 2023, county-level instant retail reached RMB 150 billion, growing 23% year-on-year and accounting for 23% of the total.
  • Meituan now covers 2,800 counties and cities, while JD Daojia covers 2,000 counties and districts.

This shows instant retail is no longer limited to big cities but is spreading nationwide.

 

United States: A Retailer-Centric Model

The U.S. instant retail market differs significantly due to dispersed urban layouts and higher logistics costs, leading to heavier reliance on retailer partnerships.

  • Instacart: A classic asset-light model that does not build warehouses but connects consumers with supermarkets. Orders surged tenfold during the pandemic,     making it a household necessity. Its successful IPO in 2023 reflected investor confidence.
  • DoorDash: Originated in food delivery, later expanded to groceries and daily goods. Its growth logic is similar to Meituan’s, but scaling nationwide is harder due to lower population density.
  • Amazon Prime Now: Promised one-hour delivery but remains limited in coverage, underscoring the challenges of replicating China’s dense instant retail     ecosystem in the U.S

In the U.S., instant retail is primarily about leveraging large supermarket partnerships. Instacart’s tie-ups with Costco and Kroger, for instance, allow rapid access to mainstream households

VII. Historical Lessons and Failed Experiments

Instant retail is not entirely new; multiple companies have experimented—some with notable failures that provide valuable lessons.

  • MissFresh (China): Once hailed as the pioneer of the front-warehouse model, it rapidly expanded after 2015 and reached a peak valuation of over USD 3 billion. However, high operating costs and insufficient order density led to unsustainable losses. In 2022, the company delisted, highlighting the difficulty of making front-warehouse economics work.
  • The O2O “Group-Buying Wars” (China, 2014–2016): Hundreds of platforms fought for dominance, but most collapsed under subsidy battles. Meituan emerged as the clear winner, underscoring that only well-funded players with scale can survive such competition.
  • Amazon Prime Now (U.S.): Despite being technologically advanced, the service struggled to scale nationwide due to America’s dispersed population and high logistics costs.
  • Gorillas and Getir (Europe): Once considered Europe’s “15-minute grocery delivery unicorns,” they burned cash to acquire customers but faltered when capital inflows slowed. Many were forced to downsize or sell

Key takeaway: instant retail is not a business that can succeed purely through subsidies or speed. Long-term survival requires scale, capital strength, operational efficiency, and patience.

 

VIII. Key Players: Strengths and Weaknesses

Source: Poseidon

1. Meituan Flash Buy (China)

  • Strengths: Backed by a massive rider network and industry-leading AI dispatch systems, Meituan has nationwide reach and strong delivery resilience, even in extreme weather.
  • Weaknesses: High delivery costs and recurring controversies over rider labor rights could invite regulatory scrutiny; supply chain depth in high-quality products lags behind JD.com.

2. JD Daojia

  • Strengths: Deep partnerships with Walmart, Yonghui, and other supermarkets, plus JD.com’s supply chain and brand reputation, make it strong in household procurement and fresh goods.
  • Weaknesses: Reliance on supermarket partners reduces flexibility, and overall market share trails behind Meituan.

3. Instacart (U.S.)

  • Strengths: Asset-light model allows fast scaling; its partnerships with Costco and Kroger give it mainstream household reach. Pandemic-driven demand cemented its role in U.S. households.
  • Weaknesses: Margins are thin, and reliance on supermarkets means limited control over supply chains and pricing.

4. Pupu Supermarket (China)

  • Strengths: Innovated with a “front-warehouse + dense large-warehouse” model, reducing fulfillment costs by 35% compared to industry peers. Its SKU (stock keeping unit) count (6,000–8,000) exceeds competitors, and in 2024 it achieved RMB 30 billion in revenue with a 22.5% gross margin, marking its first full-year profit.
  • Weaknesses: The front-warehouse model remains capital- and density-intensive, making expansion into lower-density regions more challenging.

IX. Challenges and Opportunities

Challenges

While instant retail is expanding rapidly, it faces a series of structural challenges that may constrain long-term sustainability. The first is high cost pressure. Delivery is the core of instant retail, yet courier expenses typically account for 20% to 30% of platform revenue. When combined with the fixed costs of front warehouses and store-warehouse hybrid formats—such as rent, labor, and infrastructure—the overall cost burden remains heavy. This means that even with surging order volumes, profitability is often squeezed. The second challenge is complex inventory management. Instant retail involves a vast number of SKUs, spanning fresh produce, medicines, and fast-moving consumer goods. Demand is highly volatile—driven by weather changes, holidays, or sudden events—and inaccurate forecasting can lead to either frequent stockouts or costly spoilage, placing unprecedented demands on supply chain efficiency. Third, platforms struggle with user retention. In such a competitive environment, consumers are highly price-sensitive and face minimal switching costs, resulting in low loyalty. Platforms are therefore forced to rely on subsidies, coupons, or membership programs to maintain engagement, further amplifying costs. Finally, there are growing regulatory and environmental pressures. Stricter enforcement of rider welfare and social security requirements, as well as tighter controls on food and drug safety, are raising compliance costs. At the same time, the push for sustainable packaging increases operational expenses: biodegradable packaging is estimated to cost roughly 30% more than conventional alternatives—an especially heavy burden in an already low-margin industry.

Opportunities

Despite these challenges, the opportunities ahead remain significant. The most obvious is continued market expansion. Industry forecasts suggest the market will surpass RMB 1 trillion by 2025, with long-term potential measured in tens of trillions—far from reaching saturation. Second is the underutilized user base. By 2023, active instant retail users in China totaled 580 million, only 53.1% of the country’s 1.09 billion internet users. This leaves nearly 500 million potential users untapped, particularly among older demographics and consumers in lower-tier cities. Third, the rise of county-level markets is accelerating. In 2023, county-level instant retail reached RMB 150 billion, growing 23% year-on-year—already outpacing first-tier cities. Both Meituan and JD Daojia are expanding aggressively into these regions to capture future growth. Finally, the industry is likely to benefit from multi-model coexistence and complementarity. Platform-based models (e.g., Meituan Flash Buy, JD Daojia) will continue to dominate mass markets, front-warehouse models (e.g., Dingdong, Pupu) will achieve scale advantages in dense urban areas, while store-warehouse hybrids (e.g., Freshippo) will cater to premium and membership-driven demand. The coexistence of these models strengthens the industry’s resilience and provides more avenues to achieve sustainable profitability.

 

X. Conclusion

Instant retail has evolved from food delivery into a full-fledged retail infrastructure, reshaping how people access daily essentials. It fulfills consumers’ demand for convenience and immediacy, while offering retailers and platforms a new growth frontier.

Over the next decade, instant retail will likely develop along four main dimensions:

  1. Broader Penetration: Expanding from top-tier cities into county markets, and from younger demographics to middle-aged and older users.
  2. Technology-Driven Efficiency: AI-powered demand forecasting, autonomous vehicles, and automated warehouses will further cut costs.
  3. Diversified Revenue Streams: Beyond commissions, platforms will increasingly rely on advertising, memberships, and financial services.
  4. Regional Differentiation: China will continue down a “high-density, high-efficiency” path; the U.S. will focus on supermarket partnerships; Europe will search for sustainable models post-capital frenzy.

In conclusion, instant retail is no longer a short-term trend but a long-term structural shift in the retail sector. Its essence lies in transforming “in-store” shopping into “at-home” fulfillment, driving efficiency gains across the supply chain and reshaping consumer behavior. Over the next decade, as the market continues to expand, user penetration deepens into lower-tier cities, and technology advances, instant retail will gradually evolve into a critical infrastructure of global commerce.

From a competitive perspective, we believe that Meituan and Alibaba are best positioned to emerge as long-term winners. Meituan’s strength lies in its massive and mature rider network, combined with a broad, high-frequency user base that ensures strong fulfillment efficiency and stickiness. Alibaba, on the other hand, has the financial firepower to deploy large-scale subsidy strategies, enabling it to rapidly capture market share. In contrast, JD.com, though pursuing a strategy similar to Alibaba’s, lacks equivalent capital strength, which may constrain its ability to sustain aggressive expansion. As such, the dominant positions in China’s instant retail market are likely to consolidate around Meituan and Alibaba, while JD.com may focus on leveraging its supply chain capabilities to carve out a differentiated niche.

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