The biggest impact of China’s meal-delivery subsidy war may be changing consumer expectations. With Chinese E-Commerce rapidly evolving, customers can now order electronics, flowers, and even medications and have them delivered within an hour.
So-called quick retail has become the new battlefield in online shopping after a year in which Meituan (3690.HK), Alibaba (9988.HK), and JD.com (9618.HK) opened new tabs and spent billions of dollars on coupons, free delivery, and merchant incentives.
Analysts said the bigger bet was on changing shopping patterns, especially in the largest cities where consumers increasingly anticipate things as varied as groceries and cosmetics to arrive within 60 minutes, even though firms’ spending spree moved billions of dollars to frugal consumers.
Delivery of drinks and meals may result in frequent app visits, but the bigger opportunity is to turn those trips into purchases of non-food items with better margins.
Consumer expectations on dependability and convenience have been drastically altered by quick commerce. During an earnings call, Meituan Chief Financial Officer Shaohui Chen stated, “It is an irreversible lifestyle shift.”
According to Ministry of Commerce study, the instant-retail business is expected to reach a value of 1.2 trillion yuan ($178 billion) by year’s end and expand at an average annual rate of ∼12.6% until 2030.
Jiang Yanxin, a resident of Beijing, recently ordered a “Niu Lai” doll based on a character from a popular animated movie while traveling to have lunch with friends. A courier had arrived at the restaurant by the time she got to her table.
