With the rapid rise of the instant retail market, consumers’ demand for fast delivery is growing, and traditional e-commerce platforms are facing unprecedented challenges. As an e-commerce giant, Taobao quickly adjusted its strategy, upgraded “hourly delivery” to “Taobao flash sale”, and cooperated with Ele.me in depth to try to stand out in the field of instant retail. This article will provide an in-depth analysis of Taobao’s flash sales upgrade strategy, competitive advantages and challenges, and explore how it can improve user experience and expand market share through innovative services and resource integration in the fierce market competition.
Driven by the progress of digital technology and changes in consumption habits, online shopping and local life services are rapidly combined, and the instant retail market has entered a stage of rapid development. At present, consumers are showing a clear trend of change: they no longer accept the delivery time of traditional e-commerce for days or even weeks, and have higher expectations for the speed of product delivery. From urgently needed daily necessities to impromptu food ordering, “getting the goods immediately after placing an order” has gradually become a daily consumption choice for most people.
In the face of this general trend, Taobao quickly attacked. It is reported that on April 30, Taobao officially upgraded “Hourly Delivery” to “Taobao Flash Sale”, and reached in-depth cooperation with Ele.me, with Ele.me focusing on ensuring takeaway delivery services. This move quickly set off a wave of instant shopping across the country, and the full launch originally scheduled for May 6 was brought forward to May 2.
A “long-planned” instant retail breakthrough battle
In the context of the rapid development of the e-commerce industry, instant retail has gradually become a new growth point. Taobao’s upgrade from “hourly delivery” to “Taobao flash sale” is not accidental, but an active choice after comprehensively considering multiple factors such as changes in market demand, the operational experience accumulated by enterprises, and intensified competition in the industry.
First, instant retail is developing rapidly, and Taobao’s upgrade of “hourly delivery” to “Taobao flash sale” will help seize this market opportunity. With the acceleration of the pace of life, consumers are increasingly pursuing a shopping experience of “placing an order and receiving goods”, and the delivery timeliness of traditional e-commerce is difficult to meet the demand. The instant retail model covering all kinds of daily necessities can not only accurately match the immediate needs of users, but also maintain a strong market growth momentum, showing great development potential. In response to this trend, Taobao has taken the initiative to strengthen investment in the field of instant retail based on its timely judgment of market changes, and strives to win development advantages in this emerging and promising market.
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Second, as a leading e-commerce platform in China, Taobao has noticed the market potential of instant retail for a long time and has begun to try related businesses. The original “hourly delivery” service was Taobao’s initial exploration in this field. In the early stage of its business, Taobao focused on establishing cooperation with well-known chain companies such as Suning and Wal-Mart, gradually covering mobile phone digital, maternal and infant products, flowers, food, pet supplies and other categories needed for daily life.
In July 2024, Taobao will fully launch the “Hourly Delivery” service portal on the homepage, allowing more consumers to directly use this service. In just one month after that, more than 3,000 official Apple authorized stores across the country have accessed the service, followed by well-known brands such as clothing brands Jack Jones and ONLY. These cooperation accumulations not only cultivated user usage habits, but also laid a solid foundation for the service to be upgraded to “Taobao Flash Sale”.
Third, although the “hourly delivery” service has achieved initial results, Taobao needs to make greater efforts to enhance its competitiveness at the moment when the instant retail market is accelerating. In the current market pattern, platforms such as Meituan Flash Sale and JD Daojia have occupied an important position, and they continue to attract consumers and merchants by improving their distribution networks, increasing product types, and increasing marketing promotion. In the face of this competitive situation, Taobao must completely upgrade its instant retail business in order to achieve a breakthrough in user experience and platform attractiveness.
At the same time, consumers’ demand for instant service is escalating: they want to receive goods quickly, but also look forward to more discounts and a more intimate service experience. The upgrade of the “Taobao Flash Sale” is an active adjustment made in response to these new needs. By establishing close cooperation with Ele.me, the two sides share offline store resources and instant delivery capabilities to jointly create more affordable and convenient shopping solutions.
Taobao flash sale “fan attraction” password
After completing the upgrade and transformation from “hourly delivery” to “Taobao flash sale”, Taobao is innovating service models and integrating multiple resources to achieve rapid development in the instant retail market.
First, Taobao Flash Sale and Ele.me jointly launched a 10 billion subsidy plan to improve user consumption experience through diversified preferential activities. The subsidies jointly funded by the two sides cover practical benefits such as free red envelopes, buy one get one free drink, and takeaway discount coupons, covering a variety of consumption scenarios such as daily ordering, snacks and drinks, and supermarket shopping. This subsidy strategy not only reduces the actual payment cost of users, but also stimulates consumption intention through limited-time discounts, which not only improves the popularity of the platform, but also enhances the stickiness of users, providing effective support for Taobao flash sales to quickly expand the scale of users.
Second, Taobao flash sales effectively integrate online and offline merchant resources and build a diversified commodity supply system. The platform makes full use of Taobao and Tmall’s brand e-commerce partner resources and Ele.me’s nationwide network of local life service merchants to upgrade product supply capabilities. For example, by connecting brand warehouses and offline store resources, the commodity inventory of Tmall flagship stores is connected with instant delivery services, and at the same time, a brand-exclusive instant retail area is set up to expand the access scale of chain merchants such as convenience stores and supermarkets. At present, more than 3 million physical stores across the country have opened hourly delivery services, covering the main categories required for daily life, including well-known brand products with reliable quality, as well as a variety of daily consumer goods, which can meet the various needs of different consumers.
Third, Taobao Flash Sale’s delivery service is guaranteed by Ele.me, and its mature distribution network and rich local service experience provide a solid foundation for fast delivery. Relying on a huge distribution team covering the whole country and an intelligent order distribution system, the platform promises 30 minutes delivery to major cities across the country. According to public information, within 24 hours of the launch of Nai Xue’s tea on Taobao, Ele.me’s orders increased by more than 200% year-on-year. Among them, efficient distribution services are inseparable. The ability to deliver quickly allows consumers to receive goods in a short period of time, which not only improves the shopping experience, but also gives Taobao flash sales a clear advantage in the instant retail market.
There are many challenges ahead, how to “fight monsters and upgrade”?
Although Taobao flash sales have begun to show their edge, the instant retail market is highly competitive and the road to development is not all smooth sailing.
First, the instant retail market is highly competitive, and Taobao flash sales face multiple challenges. Platforms such as Meituan Flash Sale and JD Daojia have been operating for many years, and have accumulated a large number of loyal users and formed a mature operation method. Taking Meituan as an example, it relies on the local merchant resources accumulated in the takeaway business to establish in-depth cooperation with more than one million merchants, and users have special trust in their delivery services; JD Daojia relies on the timeliness advantage of JD Logistics and the supply chain capabilities of home appliances to occupy obvious advantages in digital 3C, household appliances and other fields.
For Taobao flash sales, in order to break through in the market occupied by these mature platforms, it is not only necessary to continue to invest in promotional activities and publicity, but also to find unique competitive advantages through service experience optimization. If you only rely on price subsidies to attract users, you are prone to falling into the dilemma of price reduction competition and it is difficult to maintain long-term growth momentum.
Second, Taobao flash sales are currently facing the dual challenges of cost and profitability. Large-scale subsidies, expenses for cooperation with Ele.me, and the manpower and material investment required to maintain fast delivery have led to continuous increase in operating costs. Although it attracts a large number of users and merchants through discounts in the early stage, how to maintain users’ enthusiasm for consumption and merchants’ willingness to cooperate after stopping subsidies in the future is the core issue that needs to be solved.
In addition, instant retail business involves multiple links such as commodity allocation, inventory management and distribution services, and each step needs to be carefully managed, otherwise profits are easily depressed. Taobao flash sales need to expand new ways of making money, such as increasing revenue through membership services, optimizing purchasing channels to reduce costs, or trying advertising cooperation models such as product recommendations to achieve sustainable financial goals in a highly competitive market.
Third, Taobao flash sales still need to make breakthroughs in technology and service standardization. Although it is connected to Ele.me’s distribution network, there are still technical difficulties in achieving a stable service level of 30 minutes delivery nationwide. The complex urban traffic conditions and the distribution pressure during peak order hours all put forward higher requirements for the intelligence of the distribution scheduling system. In addition, the platform integrates different merchant resources from Taobao, Tmall and Ele.me, and the problem of inconsistent product quality and after-sales service standards is more prominent. How to formulate unified service standards to ensure that consumers can receive the same quality of service whether they buy daily necessities or fresh food is an urgent challenge to be solved. If there is a delivery delay or inadequate service, it will not only affect the shopping experience, but also damage the platform’s reputation.
Fourth, Taobao flash sales face continuous challenges in user retention. Although the instant retail market is developing rapidly, consumers’ loyalty to the platform is generally not high, and factors such as preferential prices, fast delivery, and complete product types may affect their choice. How to transform new users attracted through subsidies into long-term stable consumer groups and cultivate daily usage habits is an urgent problem to be solved. The market is becoming increasingly competitive, and other platforms continue to launch promotions and new services, making it easy for users to be diverted. If Taobao flash sales cannot establish differentiated service advantages, it will be difficult to maintain an advantageous position in the competition.
The comprehensive upgrade of Taobao flash sale is an important strategic move of Alibaba in the field of instant retail, which has achieved significant results in the early days of its launch by providing preferential activities to attract consumers, uniting offline merchants to enrich the supply of goods, and using Ele.me’s distribution network. However, in the face of an increasingly competitive market environment and increasingly diverse user needs, Taobao flash sales still need to deal with multiple tests. It remains to be seen how to maintain service innovation and continue to enhance the competitiveness of the platform in the context of imitation and follow-up by competitors and rapid changes in user habits, so as to promote the overall development of the instant retail industry.
