Meituan Wang Puzhong: Lightning warehouses represent the evolving trend of instant retail supply. The number will exceed 100,000 in 2027

On October 15, Meituan Flash Sale held the “2024 Meituan Instant Retail Industry Conference” (hereinafter referred to as the “Conference”) with the theme of “Evolution NOW” in Beijing. Various practitioners from industry associations, research institutes, and retailers and brands from all over the country participated in the conference to discuss new trends and development opportunities in the industry.

Wang Bin, director of the Distribution Industry Promotion Center of the Ministry of Commerce, delivered a speech at the opening of the conference. He said that in recent years, the instant retail industry has developed rapidly, the market scale continues to expand, consumer categories continue to be enriched, the customer base has grown significantly, and the lightning warehouse model has developed rapidly. Instant retail, represented by Meituan Flash Sale, relies on online trading platforms to place orders, offline delivery, and instant fulfillment, pioneering a new model of retail development, and playing an important role in smooth circulation, promoting consumption, and protecting people's livelihood.

Wang Puzhong, CEO of Meituan's core local business, shared the theme “NOW Era, New Evolution”. He proposed that with the continuous transformation of the retail industry, instant retail maintained resilient growth, and the scale of the industry increased 26.2% year-on-year from January to August this year. Behind the steady growth, instant retail as a highly deterministic lifestyle continues to expand. The supply categories and scenarios of instant retail continue to be rich, users' consumption frequency continues to increase, and instant retail consumption periods and regions continue to expand and spread. The evolution of the retail industry is similar to the evolution of species. The evolution of species is mainly air, temperature, and oxygen content. The evolution of retail is our lifestyle, infrastructure, and technological level. The emergence and prosperity of the lightning warehouse business is an important sign of this evolution.

Xiao Kun, vice president of Meituan and head of the flash sales division, said that Meituan flash sales continued to grow rapidly, and the peak order volume on Tanabata in 2024 exceeded 16 million orders. Rapid growth comes from the continuous evolution of the instant retail supply ecosystem. As an important business format that has emerged in this process, Lightning Warehouse continues to drive the evolution of the instant retail supply ecosystem and the development of user lifestyles, becoming the biggest opportunity for the industry. Currently, the number of Meituan lightning warehouses has exceeded 30,000. By 2027, there will be more than 100,000 Meituan lightning warehouses, covering all categories and regions, and the market size is expected to reach 200 billion yuan.

At the conference, Du Guochen, director of the E-Commerce Research Institute of the Ministry of Commerce Research Institute, released the “Real-time Retail Industry Development Report (2024)”. The report suggests that instant retail has become an important business format in fields such as county commerce, modern circulation, smart business districts, and leading new consumption. Among them, lightning warehouses have become a typical form of instant retail, and will play a positive role in promoting industry prosperity, helping merchants innovate local sales channels, and obtain new growth curves.

Meituan's core local business CEO Wang Puzhong shared the theme (Photo: Also available)

The era of instant retail has accelerated, and various supply species such as lightning warehouses have evolved

At the conference, Wang Puzhong reviewed the recent development history of the instant retail industry: from 2013 to gradually expanding from food and beverage takeout to other categories, to expanding from emergency categories to daily necessities in 2018, and covering fields such as digital appliances, beauty and apparel, and daily necessities in 2021, “Everything Now (Everything to Home)” instant retail became an industry consensus. Wang Puzhong believes that the era of instant retail is now arriving at an accelerated pace. It is marked by the formation and extension of instant retail as a high-certainty lifestyle, as well as the enrichment and innovation of instant retail supply.

“From January to August 2024, Meituan flash sales continued to increase in nighttime orders, reaching 26%; in sinking markets such as counties, Meituan's instant retail order volume increased 54% year-on-year. These are pure incremental purchases.” At the conference site, Wang Puzhong used these sets of data to explain the continuous expansion of the instant retail lifestyle.

“The expansion of lifestyle is inseparable from the evolution and prosperity of the supply ecosystem, which is critical to the acceleration of the instant retail era,” Wang Puzhong said that instant retail has developed a variety of supply species so far, including a “warehouse is a store” business like Lawson, a “store includes a warehouse” business like Yonghui and Da Runfa, and independent warehousing businesses such as Xiaoxiang Supermarket, Dingdong Grocery Shopping, and Meituan Lightning Warehouse.

“The Meituan Lightning Warehouse business model represents the current evolutionary trend of instant retail and is the key to promoting the prosperity of the instant retail supply ecosystem.” Wang Puzhong made the above judgment at the conference. He revealed that currently, more than 30,000 Meituan Lightning warehouses have covered all aspects of consumers' lives, such as digital appliances, mother and child toys, Japanese clothing, beauty and personal care, pet supplies, convenience stores, fruits, ingredients, alcohol, flowers, and medical devices.

The rapid evolution of lightning warehouses has brought greater development opportunities to workers in the instant retail industry. Wang Puzhong, for example, said that compared to stores and warehouses of the same size, the lightning warehouse business format has advantages from various perspectives such as rent cost, number of SKUs displayed, business hours, floor efficiency, monthly sales, and profit margin. “This will create value for both consumers and instant retailers.”

Wang Puzhong, CEO of Meituan Core Local Business, spoke at the conference (Photo: Also available)

Meituan flash sale: Lightning warehouses are the biggest opportunity in the instant retail industry. The number will exceed 100,000 in 2027

“The evolution of the supply ecosystem has created a better experience for consumers, continuously cultivating an instant retail lifestyle. The development of lifestyle has also spawned more demand and further promoted the evolution of supply.” At the conference, Xiao Kun thoroughly analyzed the evolutionary trends of the instant retail industry.

“On the day of Tanabata this year, the peak number of Meituan flash sales orders exceeded 16 million orders,” Xiao Kun said. The rapid growth reflects the evolution of supply ecology driving users' high-certainty lifestyles. At Meituan Flash Shopping, the frequency of consumption in fresh and food categories continues to grow, non-food consumption is growing rapidly, and the scenario is expanding rapidly. Behind this, 102 million users moved across cities to place orders, and 124 million users placed orders at night.

Xiao Kun, vice president of Meituan and head of the flash sales division, shared the theme (Photo: Also available)

Xiao Kun said that the deep popularity of the instant retail lifestyle has brought strong enough demand. The objective mismatch between supply and demand has spawned the emergence of the Lightning Warehouse business, and the increase in demand density has accelerated the prosperity and development of Lightning Warehouse. This has made Lightning Warehouse an excellent way to “increase immediate retail sales and obtain increments” in various physical retail businesses.

“The current lightning warehouse business continues to evolve. Lightning warehouses are rapidly climbing in the sinking market. In 2024, Meituan convenience store Lightning warehouses opened 1,866 stores in the sinking market, and various vertical categories of lightning warehouses are also booming; Lightning warehouse technology and facilities are constantly being upgraded, deepening the supply chain. The more important trend is that large retailers are speeding up the deployment of lightning warehouses.” Taking Mingchuang Premium and Watsons as an example, Xiao Kun revealed that currently, Mingchuang Premium has opened 500 stores in Meituan, and is expected to exceed 800 stores within the year, making it the retail brand with the largest number of direct-run lightning warehouses in the industry; the Lightning Warehouse opened by Watson's in Meituan covers more than 10 Tier 1 and 2 cities, and warehouse volume has increased 1.4 times.

“Lightning warehouses are the biggest opportunity in the instant retail industry. All towns that have opened takeout have the opportunity to use Lightning warehouses for instant retail.” At the conference, Xiao Kun announced the Meituan Lightning Warehouse's “Starry Plan”. Through this plan, Meituan Flash Shopping will provide merchants interested in opening a lightning warehouse with a full link of “accurate location selection, operation guidance, climbing resources, morning glory systems, and exclusive distribution solutions”, and open up platform support resources such as daily magic prices, magic coupons, product Rubik's Cube, smart distribution, and accurate marketing for merchants.

Meituan Flash Sale collaborates with several merchants to release the Meituan Lightning Warehouse “Star Plan” (Photo: Also available)

“It is estimated that by 2027, the number of Meituan Lightning warehouses will exceed 100,000, and the market size will reach 200 billion yuan,” Xiao Kun said, hoping to use the “Starry Plan” to help physical retailers and relevant practitioners share this new opportunity in the “100,000 warehouses, 200 billion yuan” instant retail market.