China New Growth: Booming instant retail fast-tracks consumption evolution-Xinhua

China New Growth: Booming instant retail fast-tracks consumption evolution

Source: Xinhua

Editor: huaxia

2023-11-17 13:57:45

BEIJING, Nov. 17 (Xinhua) -- How many items would one need to pack for a week-long holiday? The answer for a growing number of young Chinese travelers is nothing but a cellphone.

Following an order placed on one of many online shopping platforms like Meituan by using a cellphone, the likes of a toothbrush, medicine, beer, instant noodles and other daily-use items can be delivered to the consumer in about half an hour, making up part of the scope of a popular shopping model known as instant retail or on-demand retail.

"China might not be the country with the most convenience stores in per capita terms, but it's able to offer the most convenient around-the-clock shopping experience for many thanks to instant retail services," said Xiao Kun, vice president of Meituan and head of the e-commerce giant's flash shopping business, which has partnered with over 4,600 large chain retailers and 370,000 stores to offer related services.

Consisting of online ordering, offline distribution and speedy delivery, instant retail has been developing fast across China as digital-savvy consumers become inclined to trade money for time due to their need for speed.

"Instant retail is an evolutionary version of online shopping that has not only met consumers' demands, but also created new demands," said Pei Liang, head of the China Chain-Store & Franchise Association. "It's the iconic model of the fourth retail revolution."

This emerging retail business has maintained an average annual growth rate of more than 50 percent in recent years, with its market size topping 504 billion yuan (about 70.3 billion U.S. dollars) in 2022, according to a report by the Ministry of Commerce (MOC).

The report predicted that by 2025, China's instant retail market volume will be three times that of 2022. The growing market has secured investment from China's leading e-commerce players. announced in October that it will empower the digital retail transformation of more than 2 million Chinese small and medium-sized physical stores in five years. Meituan is using drones to deliver instant retail orders and estimated that its flash shopping business will exceed 400 billion yuan by 2026.

Lured by access to a larger number of consumers, many mostly brick-and-mortar retail brands have embraced the new business form to cater to Chinese consumers' shifting consumption preferences.

French beauty brand Sephora has launched instant retail services in all its offline stores in China. It saw a 1,243-percent surge in sales during this year's Qixi Festival, or Chinese Valentine's Day, compared with a normal day a week earlier, as many consumers placed online orders for cosmetics as festival gifts.

China's online retail volume expanded 11.2 percent in the first 10 months of this year, much faster than the 6.9-percent growth of total retail sales of consumer goods.

The development of instant retail will help accelerate the digital transformation of the traditional retail industry, spur spending and create more jobs, said Du Guochen, deputy director of the e-commerce research institute of the Chinese Academy of International Trade and Economic Cooperation, a think tank under the MOC.

The Chinese government is promoting instant retail beyond big cities. It has unveiled plans to boost instant retail services in county-level regions and rural areas as a move to encourage consumption, a key driver of the world's second-largest economy.

"Instant retail is one of the consumption bandwagons of the times, and it's driven not only by internet technologies, but also by the improvement of logistics infrastructure and per capita GDP in China," said Meituan senior vice president Wang Puzhong, who heads the company's home-delivery businesses.

"In the same vein, it entails joint efforts to further push the evolution of instant retail," Wang added.