Guoxin Securities: Immediate retail with broad forward market space, optimistic about Meituan-W (03690) and other companies

The Zhitong Finance App learned that Guoxin Securities released a research report saying that competition in the retail market will return to efficiency competition in all aspects. Similar to e-commerce, only players who can bring about changes in efficiency have the ability to disrupt the market pattern. Meituan-W (03690) has obvious advantages in terms of organizational capability, refined user operation, number of lightning warehouses covered, scale of self-operated business, and delivery efficiency. The bank is optimistic that Meituan will continue to maintain its leading position in the instant retail market in the future. Alibaba-W (09988) has shown stronger organizational capabilities than before in this war. Using its financial advantages and user traffic advantages, it is expected to reshape the user mentality of Taobao apps. However, it has not yet introduced disruptive strategies in the food and beverage takeout and instant retail scenarios, and further changes in market share are needed. The JD Group-SW (09618) contract implementation and supply side are still in the construction stage, but in the long run, immediate retail, takeout, e-commerce cross-selling, and the corresponding overall supply chain layout are expected to be profitable.

Guoxin Securities's main views are as follows:

Instant retail is a retail format that meets immediate local demand through instant online ordering and offline instant contract fulfillment, relying on local retail supply

Currently, demand for instant retail is mainly due to a shift in offline scenarios. In 2024, the market size has reached 780 billion yuan, and the compound growth rate in the past 5 years has reached 46%. From the perspective of “more, faster, better, and provincial”, “fast” is the core advantage of instant retail. Through improving operational capacity and building a supply chain system, it is expected to narrow the “multiple” and “provincial” gap with far-field e-commerce and impact its market share. The bank estimates that the long-term market space for instant retail is expected to exceed 3 trillion yuan, and may cause the growth rate of some e-commerce platforms to slow down or even fall into a negative growth range. Therefore, currently all major e-commerce platforms are actively promoting the layout of the instant retail sector.

Instant retail includes two models: platform and self-operated. Among them, the platform model accounts for 60%-70% of the market share, and Meituan maintains a leading position; the self-operated model covers front-end warehouses, integrated stores, and “1+N” forms, mainly focusing on fresh food and supermarket categories. The three elements of instant retail are immediate demand (users & traffic), instant delivery (fulfillment), and local supply (supply). Based on this, the bank divided the development process of instant retail into four stages. The bank believes that ability to fulfill contracts is a long-term competitive barrier for instant retail. At this stage, the market competes for users through subsidies and traffic advantages, but the subsidy model is not sustainable, and the focus of long-term competition will shift to the supply side. Therefore, Meituan and Alibaba will remain core players in the market now and in the future.

Analyze the competitive landscape of real-time retail from the dimensions of organization, user, supply, and contract fulfillment

1) Organization: Compared with the takeout war in 18-19, the various platform teams are more mature. Ali's multiple businesses have been unified, and organizational efficiency has been greatly improved; 2) Users: Subsidies are the key to driving user growth. The competition is financial strength and operational capacity. Ali has a financial advantage, and Meituan's subsidy efficiency is higher. 3) Supply: On the one hand, Lightning Warehouse is the key to meeting “many” demand. Meituan Lightning Warehouse has a significant quantitative advantage, but as Taobao flash sales orders increase and more Lightning warehouses begin to try Taobao flash sales, the quantity gap between the two will gradually narrow. In addition, Ali is also building nearby brand flagship stores, but the overall pace of construction is relatively slow. On the other hand, the layout of self-operation is the key to achieving “good” and “province”, and platform data resources and traffic resources can effectively empower self-operated businesses. Currently, Meituan and JD have a richer business structure, and their business layout has been further accelerated since this year. 4) Compliance: With the scale effect, huge distribution team and hierarchical capacity system formed by the food and beverage takeout business, Meituan has built a deep distribution barrier, and its advantages are difficult to shake in the long run.

Looking at the long term, the bank estimates that Meituan Flash Sale GTV is expected to reach close to 1.1 trillion dollars in 2030, contributing 18.6 billion dollars in profit. Ali's takeout, instant retail, and e-commerce cross-selling will bring in close to 1 trillion GMV, but the contribution profit is limited, and the core goal is to achieve GMV growth. JD's forward takeout, instant retail, far-field e-commerce, and supply chain layout are expected to achieve overall profit.

Risk warning: Risk of increased industry competition, risk of industry demand falling short of expectations, risk of macroeconomic downturn, risk of long-term spatial assumptions being too optimistic, risk of long-term spatial assumptions being too optimistic/pessimistic, risk of rider cost changes, risk of new business models and technologies disrupting the market pattern.