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Instant retail sizzling as turf war among big names heats up

JD takes on rivals with its optimized rules tailored for food delivery riders

By FAN FEIFEI | China Daily | Updated: 2025-04-22 00:00
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Competition in China's instant retail sector is intensifying as major online players are upping the ante on lucrative on-demand food delivery services to seek new sources of revenue and bolster the digital transformation of traditional brick-and-mortar stores, experts said.

They called for more efforts to step up investments in technology and supply chain innovation, and optimize delivery networks and inventory management by adopting intelligent warehousing and distribution systems to further improve delivery efficiency and user experience.

Chinese e-commerce giant JD announced that starting Monday, consumers whose orders arrive more than 20 minutes late will receive them free of charge. This move comes as some of its domestic rivals set rules for food delivery riders to take orders from only one platform.

JD said in an open letter that it will step up the recruitment of full-time delivery riders, raising the quota from 50,000 to 100,000 in the next three months. It will allocate sufficient orders to delivery riders who were fired by competitors for taking orders from JD, and ensure that their incomes will not decrease.

The company emphasized that it will never force its riders to "choose one out of two" platforms, encouraging them to accept orders freely from different platforms. JD will also offer job opportunities to spouses of all food delivery riders.

The announcement follows JD's February entry into the highly competitive food delivery sector, which is currently dominated by Meituan and Alibaba Group's Ele.me.

Chen Liteng, senior analyst at the Internet Economy Institute, a domestic consultancy, said JD has gained an upper hand in quality control and high-efficiency logistics and delivery networks, but it still faces some challenges in cultivating user habits and expanding the scale of riders, while striking a balance between lowering fulfillment costs and profit margin pressure.

By comparison, Meituan has accumulated abundant experience in the food delivery segment, boasting a strong fulfillment capability with a network of 7 million delivery staff. However, its high commission fees have long been questioned by consumers, Chen said.

Chen added that the two platforms should step up efforts to leverage automated technologies to lift dispatching and delivery efficiency and lower operational costs, while enhancing user stickiness and improving repurchase rates.

Instant retail refers to a model where shoppers place orders on online trading platforms, followed by retailers from brick-and-mortar stores executing door-to-door deliveries themselves or through a third-party delivery platform. An on-demand delivery order usually requires 30 to 60 minutes to be completed.

According to a report from the Chinese Academy of International Trade and Economic Cooperation, the market scale of China's instant retail sector was 650 billion yuan ($89.2 billion) in 2023, up 28.89 percent year-on-year. The figure is expected to surpass 2 trillion yuan in 2030.

JD said in February that it will provide full-time food delivery riders with comprehensive social insurance and housing funds, making it the first platform in China to offer such extensive insurance coverage for delivery personnel.

The company also revealed that catering merchants who register on its platform before May 1 will enjoy commission-free services for the entire year, alongside comprehensive support.

Meituan has announced plans to offer both full-time and part-time riders social insurance starting in the second quarter. The on-demand services provider officially rolled out its instant retail service Meituan Shangou — or Meituan "flash purchases" — last week, providing 24-hour shopping services, with deliveries finished within approximately 30 minutes. Customers can select from a wide range of products, including fresh produce, snacks, electronics, beauty items and pet care supplies.

Zhu Keli, founding director of the China Institute of New Economy, said JD, which relies on its advantages in terms of supply chains and brand reputation, is striving to explore new growth points in the food delivery market, while Meituan has been engaged in local life services and is expanding its presence in the instant retail domain by leveraging its abundant merchants resources.

Noting instant retail is regarded as an important development direction for the future retail sector, Hong Yong, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation, said competition in the sector will focus on optimizing user experience, expanding service scope and enhancing supply chain efficiency.

 

Delivery employees pass through Beijing's central business district on Feb 20. ZHAO WENYU/CHINA NEWS SERVICE

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