After the carnival of 250 million daily orders, the capacity system was completely torn apart: peak timeouts, the rise of tripartite capacity, and the loosening of the platform closed loop. The two-wheel drive of instant retail is shifting from a “subsidy race” to a protracted battle of “capacity repair”, and whoever can make up for the shortcomings of contract performance first will be able to eat the next wave of dividends.
For two consecutive weekends, the more the order volume on the battle report soared, the greater the pressure on the capacity. No matter how much the platform can flexibly schedule capacity by increasing the number of crowdsourcing riders and even relaxing restrictions on merchants’ self-delivery, it is difficult to provide consumers with high-quality services that have both the two dimensions of goods and delivery experience under such a high order volume.
Many consumers have continued to have similar experiences: during the afternoon and evening rush hours, a 1.6-kilometer delivery may take 50 minutes to deliver. Even if you pick up milk tea, some take 80 minutes to pick up your meal.
So in fact, under the order rushing carnival, both platforms and consumers are partially giving up their service standards and service needs in the delivery experience.
The essence of instant retail is instant business flow and instant logistics two-wheel drive, that is, the platform is to meet consumers at the same time in good goods and good delivery experience (fast is a kind of speed, but also a service, not to mention that the delivery service is not only fast, but also includes commodity packaging, heat preservation, freshness, and even delivery person dressing, etc.).
This is where instant retail is difficult, and it is also the reason why Meituan, which has local service capabilities, can cut in and pry away part of the e-commerce share. The core of the platform war is also who can design a set of solutions that can meet the needs of good goods + good delivery at the same time, and complete the traction of users’ minds.
But now, rushing orders is the first goal, order volume is the first goal, in the process of implementing this goal, the richness of goods may continue to improve (such as the emphasis on non-meals that has gradually begun), but good delivery services are temporarily put in second place, and the platform’s control of distribution costs and distribution methods has also been strategically ignored – the platform has given more subsidies to retain riders, and a large number of participants in the tripartite capacity market are seizing the opportunity of market expansion to grow rapidly.
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But in the end, instant retail still needs to make up for the instant capacity, and the platform’s real-time capacity capacity can be achieved to a large extent based on the platform’s capacity control.
However, at the end of the order rushing war, what is left is a capacity competition environment with more participating platforms and a more mature tripartite market. The maturity of the tripartite capacity will drive the participation of some platforms with business flow advantages. Therefore, for any platform, if you want to establish a highly controlled capacity system, you will encounter new and complex tests, and the two-wheel drive battle of instant retail logistics will become more complicated.
01 The delivery time is lengthened, and the tripartite capacity opportunities are expanded
After the second order, Meituan’s instant retail reached 150 million orders, and Taobao’s flash sale “excluding self-pickup and 0 yuan purchase” reached 80 million orders. If you add JD.com’s order volume (based on the last announced 25 million, there may be actual discrepancies), the total daily order peak may be nearly 250 million.
Under the high order volume, although the order punctuality rate announced by the two companies is very high, the overall delivery time has been lengthened.
According to their respective official data, Taobao flash sales orders have a punctuality rate of 96%, and Meituan’s average delivery time is 34 minutes, which is 1 minute faster than July 5, with a completion rate of 99%. However, according to our observation and experience, during the lunch/dinner peak period, Taobao flash sale, Meituan, including JD.com, call an order of less than 2 kilometers, and there is a high probability that it will take 40-50 minutes to deliver. It has long exceeded the so-called half-hour delivery of instant retail.
There were also posts on social media about timeouts, with netizens sharing that they had been assigned to new riders with a historical order of 0 and couldn’t find their way three times, which led to timeouts.
The core reason is that the order volume has risen sharply, there are not enough riders, and the average performance time has decreased. The two companies have each replenished riders by recalling old riders, replenishing crowdsourcing, and relaxing the capacity restrictions on merchants calling tripartite, but riders, especially skilled riders, are still not enough.
The entire capacity market is in a brief state of short supply.
The delivery time during peak periods has been significantly lengthened
However, it has also spawned a rapidly developing tripartite capacity market, including third-party real-time logistics capacity such as SF Express and UU errands, as well as tripartite aggregation and distribution platforms such as ship arrival and single passenger gathering.
SF Express released a report during the 618 period that the daily increase in the number of instant delivery services in the same city has increased by more than 50%, of which the classic categories of instant retail such as beverages, supermarkets and department stores, and fast food have doubled.
Melo, the person in charge of the aggregation distribution platform, told us that at nearly 10 o’clock in the evening on July 5, their system received more than 10,000 orders within a minute; On July 12, nearly 30,000 orders were accepted in one minute.
After 3 years of development, this year with the end of JD.com and the subsequent Taobao flash sale, it has embarked on the road of rapid development. Its experience is enough to illustrate the opportunity of market expansion to aggregate delivery platforms.
It should be noted that the peak of the number of orders is not on the single day of these two weeks, but on Mother’s Day. Because the No. 5 order was suddenly accelerated in the evening, the store could not make it, the rider could not squeeze in, “it has killed the red eye”, and there was no guarantee of fulfillment at all. As a result, many stores are still fulfilling the first day’s order the next day (consumers can choose the time to use the coupon after using it).
On the 12th, the pace of Meituan’s ticket release was optimized, starting from the morning; second, the store is prepared in advance; Third, Meituan has subsidized more in-store pick-up and group purchase orders at the same time, saving a lot of capacity.
However, within half a month, there was a sudden increase of 50 to 60 million orders (calculated according to Meituan’s average order volume of 90 million the previous day), and no matter how the platform did to adjust the rhythm and strategy, it was difficult to fulfill the contract overnight and comprehensively, such as some consumers received self-pickup orders more than 40 kilometers away, such as a cup of Shanghai Auntie took 80 minutes to deliver.
02 The capacity flywheel is failing
The reduction of the fulfillment timeliness and the decline of the fulfillment experience means that the instant capacity flywheel in the two-wheel drive of instant retail is failing, and it means that the flexible and stable capacity system maintained by the instant retail platform is being challenged.
In the context of order rushing and free orders, both platforms, merchants and consumers can temporarily ignore this. However, there is great uncertainty about whether the capacity can be automatically repaired after the end of the rush. Because the number of participating platforms is increasing, the tripartite capacity market is also expanding, and the competition encountered by each instant retail platform, including Meituan, will be stronger than before at the capacity level, and the repair will not happen automatically, and it will be more difficult than the previous construction.
Meituan is the strongest representative of the transportation capacity system, taking Meituan as an example, it can be seen that the core of the system construction of the platform’s real-time transportation capacity is to achieve a balance between distribution cost, speed and service.
Therefore, reduce costs through order density; Better path planning (combined with store sites, consumer locations, and meal delivery speed) through algorithm optimization to improve speed and reduce costs; Through the combination of platform distribution + merchant self-delivery, while ensuring the performance service experience, the order volume during the flexible period is guaranteed.
At the same time, almost all platforms will control the ratio of platform delivery and merchant self-delivery, and “all platforms want to achieve closed-loop delivery.” For example, data shows that takeaway platforms have maintained more than 50% of platform delivery for a long time. We understand that some merchants are even required to do no more than 10% self-delivery.
The core is that for platforms that do instant retail, transportation capacity is the most differentiated service they can provide to brands. This is very different from the attraction of e-commerce platforms to brands that mainly focus on traffic.
Offline stores have their own traffic, non-meal brands also have e-commerce traffic, and instant retail platforms can only provide traffic increments based on geographical location at the traffic level.
The capacity is different. Domino’s, Luckin and other big KA merchants will build their own capacity systems by cooperating with third-party transportation companies, but almost no one raises riders and builds capacity teams by themselves. Therefore, for a long time, Meituan and Ele.me can rely on strong and stable transportation capacity services to attract merchants to do takeaway and participate in group buying on their own platforms – this is why takeaway is Meituan’s traffic entrance and business cornerstone; and after the store to the door, Meituan can consolidate its in-store advantage through takeaway advantages to better cope with the competition with Douyin in-store.
Therefore, instant retail platforms must have a certain control over transportation capacity and continuously strengthen their capacity service capabilities in order to form a more differentiated and stable brand appeal.
Meituan has built a huge capacity network that can meet almost all the needs of merchants.
Including: special delivery (special delivery to Meituan), direct errand delivery (similar to flash delivery, one-to-one ordering, good service, high price), city-wide delivery (long-distance delivery service), Meituan errand running and other different forms of platform delivery products realized through full-time + crowdsourced riders.
In terms of merchant self-distribution, there is also a self-built aggregation and distribution platform Qingyun, and at the end of last year, it also acquired Maltian, which does aggregation and distribution – it is said that Maltian had occupied 70% or 80% of the self-distribution market of small and medium-sized merchants at that time.
Taobao flash sale and JD second delivery also have platform distribution and aggregate distribution achieved by platform full-time, platform crowdsourcing, self-delivery and other methods in terms of structure, but they are not as rich in level and large team as Meituan.
But now, under the order rush, the order density of all platforms has increased (order volume increase), and the algorithm ability may be improved because of “competition training”, but the average delivery cost per unit is artificially increased – first, because the platform has increased incentives to encourage riders to take more orders, such as Meituan mentioned that some riders get more than 400 yuan in subsidies a day; second, in order to supplement flexible capacity, it is inevitable to use more aggregated delivery calls to third-party capacity, which means that the platform will lose part of the delivery service fee.
Even, merchants will more self-delivery through third-party aggregation distribution platforms (such as ship arrival) – the increase in the number of orders by ship arrival is already evidence. After all, when the number of order sources increases, using the aggregation distribution platform to call massive third-party rider resources is a more suitable choice.
Also, all merchants do not want to rely too much on a large platform, so many merchants will choose the latter in the competition between the aggregation and distribution services of the large platform and the aggregation and distribution services of the three parties. It is said that after Meituan acquired Maltian, many malt field merchants turned to other third-party platforms.
This is also another reason why some industry insiders believe that although aggregation distribution itself is just needed to meet the flexible needs of merchants such as explosive orders and night scenes, “the existence of large platforms’ own aggregation distribution is a very embarrassing existence” (the other is that in the long run, all platforms expect to form their own closed loop of performance).
03 The capacity flywheel should be repaired as soon as possible to meet a more complex capacity market
Platforms know that the capacity flywheel cannot collapse. JD.com previously mentioned that the core of Q2 is to consolidate the foundation, and there is no obvious follow-up to the order rush war. Taobao flash sale also mentioned that the goal in the second week is to stabilize at 80 million orders to consolidate the foundation and then rush up.
However, as mentioned above, due to the increase in participating platforms and the expansion of the tripartite market, after the order rush, the capacity reconstruction of each platform will encounter a newer and more complex environment. and because of the characteristics of instant retail high two-wheel drive, changes in transportation capacity will drive changes in business flow, which in turn will affect the evolution of the entire pattern of instant retail.
For example, it can be speculated that after the end of the order rush, because the tripartite capacity market is mature, some platforms without a capacity foundation have begun to get more entry opportunities than before, of course, Pinduoduo and Douyin. Duoduo’s front-end warehouse business has been predicted by the industry to have new moves in August.
Some large chain brands with private domain capabilities and brand mentality have also begun to do more private domain self-delivery.
In fact, many chain brands want to control the proportion of takeaway and in-store delivery, as well as the proportion of platform takeaway and private domain takeaway. After all, if platform subsidies are not considered, takeaway itself is a more expensive model. In addition to paying more service fees + commissions, merchants also mean that they will frequently participate in platform subsidy wars, which will increase the difficulty of brand price protection.
For example, in Nai Xue’s 2024 financial report, about 36.2% of orders from directly operated stores came from takeaway platforms and 5.2% from self-operated platforms, and the delivery service fee paid by the group was 346 million yuan, accounting for 7% of the current revenue.
After the end of the order subsidy, consumers will also return to the logic of price comparison. At this time, if the platform takeaway does not have a price advantage, the brand can continue to attract consumers back to the private domain through policies such as 9.9 yuan, which will create a need for tripartite transportation capacity and tripartite aggregation distribution platforms.
The mini programs of Luckin and Mixue Bingcheng are already very rich in functions and activities
Some industry analysts believe that in the long run, as instant retail enters more non-meal fields, and consumers’ instant retail mentality continues to mature, it will continue to have higher requirements for differentiated and personalized delivery experiences.
The current model of the ship is to provide services to ensure the quality of performance for big brands, not just as a tool to call capacity – on the one hand, it is taking a differentiated route, and on the other hand, it is also seizing the opportunity of service consumption mentioned in the above analysis.
Of course, the platform’s real-time capacity solutions will also evolve with the times. But in the end, all capacity services will return to the comprehensive dimensions of cost, speed, and service, and large platforms will still pursue order density, algorithm optimization, and different proportions of distribution combinations. It does not have an absolute value, and the specific data will be adjusted according to the environment and the investment planning of different platforms. This is a long-term test of immediate capacity.
In this process, the construction of the capacity system of each platform will encounter cost changes brought about by social security, changes in rider attractiveness, and how to change the variables of the capacity market driven by AI.
