Recently, job listings on third-party recruitment platforms indicate that Taobao Grocery is hiring business developers (BD) in Shanghai, specifically in Jiading District. The primary job responsibility is to “develop and promote Taocai’s group leaders.” Currently, Taobao Grocery is preparing to launch in Shanghai, but its WeChat mini-program and Taobao app do not yet show group points in Shanghai.
هذا العام, the fresh e-commerce industry has reignited hope, with major e-commerce giants like Alibaba, Meituan, and JD.com re-entering the market. Retail Circle has learned that JD.com launched JD Grocery at the beginning of the year and has since restarted its front warehouse model. Meituan Grocery also restarted its expansion plans earlier this year, extending its business to new areas in second-tier cities like Wuhan, Langfang, and Suzhou, thereby increasing its market share in fresh e-commerce.
According to China Market Research Group, the industry is projected to reach a scale of about 100 billion yuan by 2025. Despite the failure of Missfresh, the profitability of Dingdong Maicai has given the industry confidence. لذلك, with e-commerce giants entering the market, competition in the fresh e-commerce sector is expected to become fiercer.
Fresh e-commerce was once a top trend in the entrepreneurial world. In the industry, 2012 is considered the “first year of fresh e-commerce,” with major platforms like JD.com, SF Express, علي بابا, and Suning forming their own fresh platforms. Starting in 2014, with the entry of the capital market, fresh e-commerce entered a period of rapid development. Data shows that the industry’s transaction volume growth rate reached 123.07% that year alone.
After several years of development, a new trend emerged in 2019 with the rise of community group buying. At that time, platforms like Meituan Grocery, دينغدونغ مايكاي, and Missfresh began intense price wars. The competition was exceptionally fierce. In 2020, the pandemic provided another opportunity for the fresh e-commerce sector, with the market continuing to expand and transaction volumes growing.
لكن, after 2021, the growth rate of fresh e-commerce slowed, and the traffic dividend was exhausted. Many fresh e-commerce companies started layoffs, closed stores, and reduced their operations. After nearly a decade of development, the vast majority of fresh e-commerce companies still struggled to be profitable. Statistics show that in the domestic fresh e-commerce field, 88% of companies are losing money, only 4% break even, and only 1% are profitable.
Last year was also challenging for fresh e-commerce, with frequent layoffs and closures. Missfresh stopped operating its app, Shihuituan collapsed, Chengxin Youxuan transformed, and Xingsheng Youxuan shut down and laid off staff. لكن, entering 2023, with Freshippo turning profitable and Dingdong Maicai announcing its first GAAP net profit for Q4 2022, and Meituan Grocery nearly breaking even, fresh e-commerce seems to be entering a new phase of development.
Early this year, JD Grocery quietly launched, and Dingdong Maicai held a vendor conference, preparing for major operations. Subsequently, Meituan Grocery announced its expansion into Suzhou, and in May, Taocai officially rebranded as Taobao Grocery, merging the next-day self-pickup service Taocai with the hourly delivery service Taoxianda. These moves indicate that the fresh e-commerce industry is undergoing new changes.
Clearly, from the market size and future development perspective, fresh e-commerce represents a significant opportunity. لذلك, major fresh platforms are actively adjusting or enhancing their business layouts in this field.
JD Grocery Relaunches Front Warehouses: Retail Circle learned that as early as 2016, JD.com had laid out plans for fresh e-commerce, but the results were minimal, with development being lukewarm. لكن, this year, with the “revival” of the fresh e-commerce industry, JD.com has accelerated its layout in this field. At the beginning of the year, JD Grocery quietly launched, and soon after, two front warehouses began operations in Beijing.
Front warehouses, an innovative operating model in recent years, differ from traditional warehouses far from terminal consumers by being located near communities. This brings a better shopping experience for consumers but also higher land and labor costs for the platform, which is why many are skeptical of the front warehouse model.
For JD.com, with its strong capital and logistics system, these impacts are minimal. Relaunching front warehouses complements JD Grocery’s previously unreachable self-operated segment, giving it more control. Previously, JD Grocery operated on an aggregation platform model, involving third-party merchants like Yonghui Superstores, دينغدونغ مايكاي, Freshippo, Sam’s Club, باغودا, and Walmart.
Meituan Grocery Expands Aggressively: Retail Circle learned that Meituan has also accelerated its fresh e-commerce layout this year. Since February, Meituan Grocery has resumed its expansion plan. حالياً, it has launched new businesses in parts of second-tier cities like Wuhan, Langfang, and Suzhou, increasing its market share in fresh e-commerce.
In terms of products, Meituan Grocery has expanded its SKU. Besides vegetables and fruits, it now offers more daily necessities, with the SKU exceeding 3,000. Data shows that most of Meituan’s newly opened front warehouses in 2022 were large warehouses of over 800 square meters. In terms of SKU and warehouse size, Meituan is close to a mid-to-large supermarket.
علاوة على ذلك, Retail Circle noticed that recently, Meituan Delivery announced plans to strengthen its instant delivery cooperation ecosystem, partnering with SF Express, FlashEx, and UU Runner. This collaboration, combined with Meituan’s own delivery system, will create a richer delivery network for merchants, indicating a trend from competition to cooperation in the instant delivery industry.
Taobao Grocery Focuses on Instant Retail: In May, Alibaba merged its community e-commerce platform Taocai with its instant retail platform Taoxianda, upgrading it to Taobao Grocery.
حالياً, the Taobao app homepage has officially launched the Taobao Grocery entrance, providing “1-hour delivery” and “next-day self-pickup” fresh retail services for users in over 200 cities nationwide. For the platform, integrating local retail-related businesses can meet consumers’ one-stop shopping needs and further enhance their shopping experience.
At the same time, integrating local retail-related businesses can effectively avoid traffic dispersion and reduce delivery and procurement costs. Previously, the head of Taobao Grocery stated that the core reason for the merger and upgrade is to make Taobao Grocery cheaper, fresher, and more convenient for consumers. بالإضافة إلى ذلك, for Taobao, this further improves its overall e-commerce ecosystem layout.
In the past few years, the fresh e-commerce sector has often followed a money-burning and land-grabbing model. Once subsidies decrease, users tend to return to traditional offline supermarkets. لذلك, how to maintain sustained profitability has been a perennial issue for the fresh e-commerce industry. As fresh e-commerce sets out again, Retail Circle believes that the new round of competition will inevitably shift from price to quality for two reasons:
First, with the market becoming more regulated, price wars are no longer suitable for the new market environment. Retail Circle learned that since the end of 2020, the State Administration for Market Regulation and the Ministry of Commerce issued “nine prohibitions” on community group buying, strictly regulating behaviors like price dumping, price collusion, price gouging, and price fraud. Scenes like “buying vegetables for 1 cent” or “buying vegetables below cost price” have gradually disappeared. With previous lessons learned, the fresh e-commerce players re-entering the market will likely abandon “low price” strategies even if their expansion tactics remain unchanged. The new round of competition will be about who can offer better service and higher-quality products.
Second, consumption upgrades drive consumers to increasingly pursue product quality. With lifestyle updates and evolving consumption patterns, consumers increasingly seek convenience, health, and environmental friendliness, leading to the rapid rise of fresh e-commerce. For consumers pursuing high-quality living, food quality and safety are becoming more critical, expanding their daily dietary needs. Fresh e-commerce platforms must focus on consumer experience and product quality, integrating offline and online seamlessly to stand out in the competition.
بالإضافة إلى ذلك, Retail Circle believes that over the past three years, consumer behavior has been repeatedly reshaped. The rise of live e-commerce challenges traditional shelf e-commerce, paving the way for more impulse and emotional consumption. Instant retail channels, while addressing immediate consumption needs, also played essential roles during special periods, finally finding their niche.
As a representative of affordable and essential consumption, grocery shopping can provide valuable traffic and order flow for e-commerce platforms facing traffic anxiety. With content industry updates and supply chain iterations, future dietary consumption will become a key battleground for giants. The fresh e-commerce industry will face even fiercer competition ahead.
