Article reprinted from: Internet Phantom Thieves Pei Pei
In the first half of this year, during the recurrence of the epidemic, an intriguing phenomenon emerged: due to logistics obstruction in many areas, "express delivery" became "slow delivery", and consumers began to "treat takeout as express delivery" "Use" to solve your daily necessities needs through takeout, flash sales and other means. This has opened a new stage in the e-commerce industry: instant retail has come to the forefront and has become the focus of industry development. Large enterprises such as Meituan, Jingdong, Alibaba and even SF Express have accelerated their layout.
What is just-in-time retail? In my opinion, it is a new retail format that connects local retail supply and meets the immediate needs of consumers through real-time logistics fulfillment capabilities. It includes the following three core elements:
Immediate demand: Consumer demand is generated immediately and hopes to be satisfied as soon as possible. Any delay will cause great damage to the user experience, and may even cause the demand to no longer be established.
Local supply: Products that meet the above needs are mainly from local suppliers, that is, suppliers not too far away from consumers. It can be a local offline supermarket or a warehousing facility such as a front-end warehouse.
instant fulfillment: is a large, stable and flexible local logistics fulfillment system that can deliver goods to users at extremely fast speeds and at reasonable costs.
As early as two or three years ago, the potential of instant retail received widespread attention, but at that time everyone focused mainly on fresh food e-commerce (grocery shopping). Pre-warehouse model, store-warehouse combination model, supermarket-to-home model... Players from all walks of life have explored all possible business models. In the minds of many investors, instant retail = grocery shopping. Although it can meet the real needs of users, the upper limit is not too high. However, the above-mentioned stereotype of and has been shattered with the progress of the times - it turns out that the immediate retail demand for standard products is also very strong, and its scale may be much larger than "buying groceries".
Take the most typical example: In the first week of June this year, the sales of mosquito coils on the Meituan platform increased by 112% compared with the same period in May, and the sales of anti-mosquito liquid increased by 95%. The city with the most orders was Shanghai. . "Why do many people choose to buy anti-mosquito products at night?" became a hot search on Weibo. The reason is very simple. There are many mosquitoes in summer, and they often appear at night. People often cannot bear mosquito bites while sleeping at night, which creates a strong and immediate demand for mosquito repellent products.
In the past, this demand could not be met. Consumers can either place an order on a traditional e-commerce platform and wait for delivery in two or three days, but will continue to be bitten by mosquitoes tonight; or they can put on their clothes and go out, take the elevator downstairs, and walk to the nearest convenience store in the dark to pay for their orders. I bought myself life-saving mosquito coils. Thankfully, now you only need to place an order on a platform like Meituan, and it will be delivered in 30 minutes. The Internet has indeed greatly improved the quality of your life!
Don’t think that mosquito repellent products are a special case. In fact, similar examples are common in daily life. For example, I have faced at least the following real scenarios in the past two years:
went out for a meeting and needed to connect to the computer to play PPT, but there was no HDMI adapter at the venue. The demonstration is about to start in half an hour, but there is no 3C supplies store nearby, and I don't know which convenience store has the adapter.
was entertaining friends at home. The friend wanted to smoke a cigarette, but he didn't bring a lighter. I don't usually smoke, so I have neither matches nor lighters at home. Even the kitchen has an electric stove and cannot make an open flame.
I suddenly sneezed non-stop before going to bed at night. It may be pollen allergy . I know which specific medicine is useful, and I can have a good rest after taking one pill, but where should I buy it in the middle of the night...
In all the above scenarios, I was finally rescued by the errand boy of the instant retail platform. After trying this convenience, I can no longer put up with the "inconvenience" I had before, and I believe the same goes for most consumers. The evolution of consumption habits is irreversible, not to mention that instant retail delivery is very cost-effective and within the acceptable range of mainstream users.Therefore, we can understand why after the current epidemic subsides, the demand for instant retail has not declined; we can better understand why 7-Eleven, Yonghui , Carrefour , China Resources Vanguard ... ...and other large supermarkets have expressed their intention to focus on the real-time retail strategy and strive to expand the scale of online transactions.
I think that instant retail is an inevitable stage in the development of the e-commerce industry, and it is also the inevitable result of the mutual penetration and mutual transformation of online and offline retail over the past many years. In short, in the past few decades, the development of domestic retail formats has gone through three main stages:
traditional retail, based entirely on offline physical stores. Consumers can buy and use immediately, and what they see is what they get. However, buyers and sellers Information asymmetry is difficult to eliminate, and it is also very difficult for businesses to achieve economies of scale.
Traditional e-commerce, relies on online virtual platforms to carry out large-scale, aggregated supply and demand matching. While consumers obtain low prices and information transparency, they also sacrifice a certain degree of timeliness.
instant retail, is essentially a fusion of online and offline retail. Orders are placed online and actual transactions occur offline, thus making up for the shortcomings of traditional e-commerce in terms of timeliness and credibility.
In essence, traditional e-commerce and traditional retail are in a mutually substitutable relationship. To a large extent, it is a " zero-sum game ". Therefore, some people have always believed that the development of e-commerce will lead to the "Retail Apocalypse" (Retail Apocalypse).
On the contrary, there is no substitute relationship between instant retail and traditional retail. Instead, online traffic is used to feed offline and expand the service scope of physical merchants. At present, the real-time retail platform with the largest transaction volume is typical such as Meituan Flash Sale . The business model is based on various offline physical stores, including mom-and-pop stores, KA supermarkets, chain brand stores, etc. The expansion of real-time retail scale will inevitably With the expansion of the transaction scale of these offline physical stores.
Just imagine, if you are a convenience store owner, your target customers used to be residents within one kilometer nearby; now, with the help of the local fulfillment network of the instant retail platform, you can meet consumer demand within 5 kilometers.
In developed countries in Europe and the United States, since the beginning of the global epidemic in 2020, "Omnichannel" has also become a popular term, including home delivery, curbside pickup, in-store pickup and other fulfillment forms - it is actually "Instant retail" in the Chinese context. In terms of business models, there have been information aggregation platforms like Google Shopping, self-operated platforms like Amazon Fresh, and third-party merchant platforms like Instacart. It can be seen that instant retail is a global strategic direction. If it can succeed in Europe and the United States, which are vast and sparsely populated, there is no reason why it cannot achieve greater development in China.
Of course, many Internet platforms have realized this and have already invested heavily in this direction. The threshold of the real-time retail market is very high, the investment is huge, and there are many requirements for the platform. Not just anyone can do it well, nor can it be done just by throwing money at it. I personally believe that Meituan currently has the greatest comprehensive competitive advantage, and it is very likely that it will maintain its advantage.
As mentioned above, the three core elements of instant retail are instant demand, local supply, and local fulfillment. Therefore, for the platform, it must not only capture the minds of users and make them develop the habit of meeting their needs on this platform; it must also cover local retailers and supermarkets to achieve a comprehensive and rich supply; it must also have a strong delivery and fulfillment system. There are not many platforms that can achieve these three points at the same time. The first thing that comes to my mind is Meituan.
Meituan’s most important and basic food delivery business is not only huge in scale, but also a high-frequency and highly sticky business, allowing users to get used to meeting their immediate consumption needs on Meituan. Centering on its food delivery business, Meituan has established an efficient delivery and fulfillment system that is rarely matched nationwide. After all, takeout is also a special instant retail format. The competitive barriers established in the takeout business can be seamlessly extended to more instant retail scenarios.
At the same time, Meituan’s in-store business already covers a large number of offline retail stores, giving it a natural first-mover advantage in connecting with local supply. Moreover, Meituan SaaS has a high market share in the catering and retail industries, which further strengthens its cohesion with local retail merchants. In addition, Meituan has established a variety of storage locations such as front warehouses for its grocery shopping business, which can be a supplement to expand the local supply chain.
More importantly, almost all the businesses currently operated by Meituan are based on "online traffic feeding back to offline entities", and most of them have strong immediacy. From hotel reservations to taxi rides, from bike sharing to running errands, from grocery shopping to medicine... "Online and offline integration + immediacy" is deeply ingrained in the DNA of Meituan and has become part of its culture. . This advantage is difficult for competitors who have become a monk by the wayside to compare.
How big can the real-time retail market be? We can make a rough calculation based on historical data. In 2021, the country's total social retail sales will be 44 trillion yuan, and online retail sales of physical goods will be 10.8 trillion yuan, and they are still growing. After years of development in the coming years, real-time retail transaction volume will reach about 10% of the country's total social retail sales, which should be a relatively conservative estimate-this means a scale of at least 5 trillion. This number is large enough and attractive enough, but it does not represent the full significance of the just-in-time retail industry.
From a more profound perspective, the challenges posed by instant retail to timeliness and user experience are far greater than those of the traditional e-commerce industry, so it will definitely promote the development of advanced technologies such as unmanned distribution, as well as artificial intelligence , Further improvement of big data analysis efficiency. For example, Meituan has been exploring drone logistics for five years and has launched it in Shenzhen at the end of 2021. History has repeatedly proven that progress in “hard technology” and basic research and development is often spurred by specific consumption scenarios; instant retail can act as such a catalyst.
In terms of industrial layout, traditional e-commerce’s centralized trading of and and centralized contract fulfillment often lead to the concentration of manufacturers’ market shares, and local manufacturers gradually lose their competitiveness. This is also the most criticized criticism of the traditional e-commerce industry by the outside world. a little. Instant retail is based on local supply and provides a new opportunity for local manufacturers and local brands. This has been initially verified in overseas markets: on the shelves of Amazon Fresh, the proportion of local alcohol brands is not only much higher than that of traditional e-commerce shelves, but also higher than that of large chain supermarkets. I believe that it is only a matter of time before such a trend appears in China.
I expect that in the future, instant retail can bring positive changes to the retail industry on three levels:
It is self-evident that it will further enhance the consumer experience and bring more convenience.
brings more opportunities to local offline retailers and promotes the revitalization of the real economy, which is being realized.
will bring a fairer and more even distribution pattern to the production side of the consumer goods industry, allowing small and medium-sized manufacturers to flourish; this may take longer.
Anyway, let’s wait and see!
