Source: Wall Street Journal.
Author: Liu Baodan

In the face of the rapidly growing market of Retail Trade, $MEITUAN-W (03690.HK)$ and$JD-SW (09618.HK)$it finally begins to reveal its true intentions and enters a state of fierce competition.

On April 15, Meituan officially launched its instant Retail Trade brand "Meituan Flash Purchase", which is positioned as "a new generation shopping platform accompanying consumers 24 hours a day." On the same afternoon, JD.com announced that the number of delivery Orders would exceed 5 million, and that it would recruit no less than 0.05 million full-time delivery workers in the current quarter.

This is just a glimpse of the battle between Meituan and JD.com for now. Since March, Liu Qiangdong has frequently spoken out, calling for the payment of social insurance for couriers and riders, emphasizing that JD.com is serious about delivery. Wang Puzhong, the CEO of Meituan's core local Business, directly provided a set of data showing that the Orders for Meituan's non-Dining categories have already exceeded 18 million.

$JD-SW (09618.HK)$ 、 $MEITUAN-W (03690.HK)$ The core executives of the two major Internet companies personally take the stage to compete, which is a rare grand occasion in recent years. Behind the scenes, JD.com is privatizing. $Dada Nexus (DADA.US)$ They have started recruiting dining merchants and providing social insurance for full-time riders, making proactive adjustments. MEITUAN-W has also begun to counter-attack.

Behind the tense atmosphere, the essence of the battle between Meituan and JD.com is the competition for the instant Retail Trade market. According to the Ministry of Commerce's "2023 Instant Retail Trade Industry Development Report", since 2018, the annual growth rate of the instant Retail Trade industry has exceeded 50%, and by 2026, the annual growth rate of instant Retail Trade could still be as high as 47.1%.

This new blue ocean with a growth rate exceeding 40% is becoming a key battleground for Internet giants to break through growth bottlenecks. Whether it's Meituan or JD.com, this is a critical battle that cannot be lost.

Confrontational.

The flash purchase business was launched internally at Meituan as early as 2018, and it is not a completely new brand. Elevating the flash purchase brand at this time undoubtedly conveys the mentality of instant retail to the outside world.

In the official announcement video, Meituan defines flash purchase as a new generation of shopping method that surpasses online shopping, featuring a 30-minute delivery time. This also means that Meituan's flash purchase is targeting not only offline retail but the entire e-commerce market.

The gap between e-commerce and instant retail mainly lies in warehousing and delivery. Wall Street News has learned that Meituan has united nearly 3,000 retail merchants, brand merchants, and local small and medium-sized businesses in counties and cities, aiming at the daily shopping needs of 1 billion consumers, with the slogan 'Flash purchase, good goods delivered in 30 minutes.'

Meituan has also launched a series of promotional activities. Starting today, Meituan's flash purchase will offer 300,000 free digital home appliances and daily necessities as 'Kick-off gifts', providing a 1-cent grab for an 88 yuan coupon package, while distributing exclusive brand coupons with a maximum value of 200 yuan.

Just a day earlier, Meituan's takeaway general manager, Xue Bing, announced at the 2025 China Catering Chain Summit that in the next three years, Meituan Takeaway will invest 100 billion yuan into the catering industry overall, which is the largest scale industry support subsidy plan in the history of the catering industry, equivalent to Meituan's net income for three years.

At the conference, Xue Bing further revealed that this 100 billion yuan will focus on four major directions, including helping merchants subsidize consumers to activate demand, providing incentives to help merchants increase income, supporting and rewarding excellent quality merchants, and promoting the coverage of clear kitchen and bright stove to 100,000 stores, strengthening industry infrastructure, etc.

From branding and promotional activities to investment in the billions, this is Meituan's first grand effort to promote its instant retail business, which means that Meituan is prepared to directly compete with JD.com on the instant retail battlefield.

In response to Meituan's proactive move, JD.com reacted quickly. On the afternoon of the 15th, JD.com transmitted three messages to the public:

Firstly, JD.com stated that due to the rapid development of the second delivery business, JD.com will recruit no less than 0.05 million full-time delivery riders this quarter, with full payment for five social insurances and housing fund, and all costs covered by the company;

Secondly, JD.com announced that today the order volume of JD.com's quality takeout will exceed 5 million orders, emphasizing that since these are takeout orders from quality dine-in restaurants, the GMV is larger than that of 10 million 'ghost takeout' orders.

In addition, JD.com has launched a "self-operated instant delivery" e-commerce business, with over 100,000 offline JD.com brand stores across the country already connected to instant delivery, with an average delivery time of less than 30 minutes. JD.com's self-operated instant delivery business covers: all supermarket categories, outfits, cosmetics, home appliances, mobile phones, various electronic products, pharmaceuticals, and other categories.

On the same day, JD.com officially launched the "JD.com New Product Growth 'Hundred Billion' Plan," which aims to significantly invest 10 billion yuan in traffic and 10 billion yuan in funds by 2025, achieving sales of over one million for 60,000 new products a year, over ten million for 6,000 new products a year, and over one billion for 600 new products a year.

From the delivery riders, takeout order volume, and support for new product plans, to the JD.com self-operated + instant delivery service model, JD.com has clearly showcased its own strengths.

One is the leader in the takeout market, and the other is a newcomer; after years of development, these two Internet giants, Meituan and JD.com, are facing their fiercest direct confrontation in the instant retail battle.

Battle for Survival

For both Meituan and JD.com, securing instant retail is a top priority that affects their own position and even future development space.

Seventy percent of Meituan's revenue comes from its core local business, including delivery services and commissions for takeout, flash purchases, and in-store services. Although takeout is a high-frequency business for Meituan, it has weaker profitability. Instant retail can reuse 7 million delivery riders and algorithm dispatch capabilities, expanding profit growth potential.

According to data provided by Wang Puzhong four days ago, Meituan's progress in fresh produce, alcoholic beverages, 3C digital products, and pharmaceuticals far exceeded expectations, with non-dining category orders surpassing 18 million. In October last year, Xiao Kun, head of Meituan's flash purchase division, stated that the number of Meituan's flash warehouses has exceeded 30,000, and will exceed 100,000 by 2027, with an expected market size reaching 200 billion yuan.

Meituan continues to expand its category in the instant retail market, particularly introducing high-ticket items like digital appliances, which directly impacts JD.com's traditional retail advantages and forces JD.com to take action.

Compared to instant retail shipping from offline stores or front warehouses, many categories of JD.com can also achieve same-day delivery, but the delivery speed of e-commerce is far inferior to that of instant retail, making the competitiveness of the two models evident. Essentially, this is a reshuffling of the e-commerce model by instant retail.

In the industry’s view, Meituan's logic is to expand from delivering takeout to delivering everything, driving transactions of non-dining goods from a high-frequency consumption entry, which can further enhance user stickiness. In contrast, JD.com needs to rely on low-frequency business to drive high-frequency business, which poses greater challenges.

However, instant retail is still in its early development stage, showing a trend of rapid growth. According to the standards of speed, quality, quantity, and cost-effectiveness, the current focus is on speed, but in terms of quality, quantity, and cost, the capabilities that e-commerce has accumulated over the years still have a high barrier to entry.

JD.com Group CEO Xu Ran expressed to Wall Street that JD.com is not considering just one quarter or one to two years, but rather aiming for long-term sustainable business development. "This is a long-term layout."

In the e-commerce field, JD.com has built its own storage and logistics system and has grown amidst Alibaba's attacks, earning hard money. In the early stages of the group buying war, Meituan also stood out by building delivery capabilities with riders, following a similarly heavy model.

Now, two giants skilled in hard work meet at a narrow path: JD.com is entering the arena while Meituan is doubling down, marking a significant event that will influence the changes in the instant retail market. The show has already begun.

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Editor/Rocky