I. Instant Retail Shows Strong Potential, but Sustained Survival Remains Challenging

To begin with, it's essential to clarify the concepts of local life services and instant retail: Local life services refer to the use of online channels to display information about local brick-and-mortar businesses, with transactions completed offline services (through in-store visits or home). This model emphasizes "geographic relevance". Instant retail, as a key component of local life services, involves delivering products from local retail models (such as supermarkets, warehouses, and storefronts) directly to consumers through same-city delivery. It covers a wide range of categories, including food & beverages, fresh produce, electronics, and pharmaceuticals. Services like hourly delivery, half-day delivery, community group purchase, and food delivery all fall within the scope of instant retail. Its high time sensitivity is the key factor distinguishing it from traditional e-commerce and parcel delivery.

The local life services sector is constantly seeing the emergence of new entrants. However, most of these newcomers tend to focus on "in-store" business models rather than delivery-heavy services, as the latter demand robust and fast-changing delivery ecosystems that many find difficult to sustain.

For example, Douyin launched "Beckoning Food Delivery" in 2021 and formed strategic partnerships with service providers like Ele.me, DADA, and SF Express. However, after lukewarm results, Douyin Life Services pivoted its local service strategy to focus on the business from group purchase to in-store visits. Kwai trialed food delivery through selected local life service merchants in 2023 but did not scale up, maintaining its focus on in-store deals of group purchase. DiDi attempted to launch food delivery twice in China but failed both times and has since shifted its food delivery ambitions to overseas markets in 2025. Community group purchase brands like Nice Tuan, Chengxin Selected and MissFresh shut down around 2023 due to operational difficulties...

Despite these setbacks, instant retail still holds vast potential within China, especially in lower-tier markets.

Industry statistics show that in 2024, China's instant retail market reached approximately RMB 780 billion, accounting for only 6% of total online retail of physical goods. The market distribution between major cities and county-level areas is roughly 7:3. By 2030, the market is expected to surpass RMB 2 trillion.

Table 2: Instant Retail Market Growth in China (2018 - 2030)

Data Source: Chinese Academy of International Trade and Economic Cooperation, National Bureau of Statistics, Reports from SDIC Securities, compiled by MoonFox Research Institute.

II. Platforms Face Growth Anxiety and Urgently Need New Growth Curves

For JD.com, local life services remain fertile ground with significant untapped potential. Among them, instant retail, characterized by high purchase frequency and rapid conversion, is undoubtedly a critical lever for driving business growth and attracting UV.

Table 3: Comparison of Different Retail Models (In Terms of Profitability Efficiency: Instant Retail > Traditional E-commerce > Offline Retail)

Traditional e-commerce has passed its high-growth phase. In recent years, large-scale promotional events such as "618" and "D11" have lost their earlier traction, signaling consumer fatigue towards excessive discounting and promotional gimmicks. In response, e-commerce platforms such as Taobao, JD.com, and Vipshop have extended promotional periods and introduced "Billion-RMB Subsidy" to maintain total sales growth. However, Pinduoduo's rapid rise and the increasing competitiveness of emerging e-commerce platforms like Douyin and Kwai have created new challenges. JD.com’s dominance, particularly in the electronics product category, is now under threat from multiple fronts.

During Meituan's Q3 2024 financial report audio conference, founder Wang Xing commented on industry trends, stating that instant retail will eventually account for over 10% of the total e-commerce market, and that Meituan Flash Sale's growth has exceeded expectations. The 2024 financial report noted: "In 2024, 'Meituan Flash Warehouses' experienced significant growth, particularly in lower-tier markets, where they have become a key growth channel for many retailers. A number of major traditional retail companies have adopted 'Meituan Flash Warehouse' model... As our instant delivery business expands, we remain committed to building a sustainable ecosystem."

According to Meituan's financial reports from 2022 to 2024, the platform's gross profit margin has grown by over 30% YoY for three consecutive years, with its gross margin increasing from 28% to 38%. Core local services revenue maintained a YoY growth rate exceeding 20%, and new business income continued to accelerate. Although Meituan Flash Sale had not yet officially launched, it was repeatedly highlighted in annual financial reports over the past 5 years as a key growth engine for the platform.

III. JD.com's Surprise PR Offensive: Rapid Expansion into Meituan's Core Territory

In early April, JD.com CEO Xu Ran stated in an interview with 36Kr that the food delivery business could help JD.com increase both user base and purchase frequency, extending its service scenarios.

On April 15, a leaked 7-minute internal meeting audio recording of Liu Qiangdong revealed his views on the domestic food delivery industry: Food delivery platform commissions can reach as high as 25% (sometimes over 30%), which he attributed to monopolistic practices that force small and medium-sized merchants to cut food quality, negatively impacting the consumer experience. He also proposed differentiated insurance policies for full-time and part-time couriers to better safeguard their rights.

As early as 2022, Meituan's financial report showed that its food delivery business had reached a peak of over 60 million orders per day. Although there is still a significant gap in order volume between the two platforms, JD Food Delivery achieved over 10 million in a single day on April 22, reflecting rapid growth.

Comparing the daily new user growth for merchant and courier platforms since the start of 2025, JD Instant Delivery Merchant Edition and DADA Instant Delivery Courier Edition apps saw a UV surge. According to MoonFox Data, JD Instant Delivery Merchant Edition app peaked in daily new user numbers on April 24. Both platform initiatives and market responses clearly indicate that JD is making a bold incursion into Meituan's food delivery "stronghold".

Table 4: New Daily User Growth on Merchant & Courier Platforms (2025)

Data Source: MoonFox iApp, Data Cycle: January 1, 2025 - April 27, 2025

For users, switching between food delivery apps has low friction. With a clear intent to order, pricing and delivery time are often the only decisive factors. Last summer, Ele.me attracted UV via its "Answer to Win Free Meal" campaign, which relied on extremely low discounts and simple, engaging interactions. While Meituan launched "Meal Group Buying", significantly lowering average order value to retain users through volume sales, though at the cost of some dining experience. In addition, Ele.me also tied its premium membership to Taobao's 88VIP, leveraging high member stickiness from Taobao to boost Ele.me order frequency.

For platforms, the fast migration of users and high usage frequency makes food delivery the best UV lever for JD.com to grow its instant retail business. But before that, onboarding a large number of restaurant merchants and recruiting a sufficient courier fleet are essential. Since launching JD Food Delivery on February 11, the platform has used a range of PR tactics to become a major industry topic, quickly moving beyond its cold start into a phase of explosive growth.

• Late February: JD took the lead in advocating reform in the food delivery sector, focusing on courier welfare. This proactive stance gave JD the upper hand in the initial "war of words". With value-driven messaging and concrete policy support, JD.com gained public recognition and courier endorsement.

• In April, JD.com and Meituan entered a second round of confrontation. JD.com issued an open letter condemning Meituan's various "misdeeds" and simultaneously rolled out new support policies and promotional benefits, once again pushing "JD Food Delivery" into the spotlight across the internet. The following day, "Liu Qiangdong Takes on Food Delivery" showcased JD's strong commitment to developing its food delivery business. With a light-hearted and humorous public image, Liu won over netizens, who jokingly dubbed his delivery persona "GG Bond". This, coupled with the platform's swift marketing response, sparked a new wave of viral attention.

During this second "war of words" wave, although Meituan responded swiftly with rebuttals, and some couriers questioned the accuracy of JD's claims on social media, the incentives offered by JD helped counterbalance earlier criticism. However, overall, the various incentives released by the platform are helping to offset the negative public opinion caused by early-stage issues. JD has still managed to earn the trust of most merchants and couriers.

Table 5: Platform-level New User Scale Growth

Data Source: MoonFox iApp, Data Cycle: January 1, 2025 - April 27, 2025

Table 6: Key Events in the 2025 "Food Delivery Battle"

IV. The "Food Delivery Battle" Ushers in a New Era of Instant Retail Competition

In April, amid the intense "Food Delivery Battle" between JD.com and Meituan, both Meituan "Flash Sale" and JD's "Self-operated Instant Delivery" services were launched simultaneously.

Just ahead of the Labor Day holiday, "Taobao Flash Sale" went live in 50 cities, followed by a nationwide rollout on May 2. To drive up order frequency during the holiday, Taobao partnered with Ele.me to issue substantial consumer subsidies such as free-order card and treat-voucher card.

According to MoonFox Data, since April 2025, JD.com's daily new user volume has continuously increased, and has surpassed Meituan's since April 16. Since the launch of its food delivery service, JD.com has also seen a steady rise in average user online time. As of April 23, average daily online time reached 14.27 minutes per user, increased by 54% compared with the same period last year.

Table 7: Changes in JD.com's Active User Online Time

Data Source: MoonFox iApp, Data Cycle: April 28, 2024 - April 23, 2025

Despite reports of issues such as "inefficient processes" and "system bugs" with JD Food Delivery, there are still many shortcomings in the courier operation procedures that need to be addressed. However, driven by benefits related to commission rates and employee protection, a large number of couriers are switching platforms, while food delivery merchants and offline stores are also accelerating their entry into "JD Instant Delivery". With intensified investment in business development models, infrastructure construction, and supporting policies, both JD and Meituan are stepping up efforts to seize market share.

Table 8: Platform Characteristics Comparison

Data Source: Public information, compiled by MoonFox Research Institute

Meituan's instant retail business is an extension of its food delivery capabilities, relying on third-party franchises and offline retail store partnerships for warehousing, and service-provider-based courier models. This asset-light strategy plays to Meituan's platform operation strengths, enabling rapid territorial expansion across cities.

JD's instant retail business places greater emphasis on its "self-operated" model, leveraging its early investments in e-commerce warehousing as a key foundation. It expands operations based on regional fulfillment centers while strengthening partnerships with offline stores, particularly branded chain stores, to enhance delivery efficiency and ensure product quality, a strategy that aligns with users' existing perception of JD's authenticity and logistics capabilities in e-commerce. The supply of local couriers primarily relies on contracted riders from DADA Instant Delivery. In recent years, JD Group's increasing equity stake in DADA has further strengthened its influence over last-mile delivery in the instant retail sector.

The attention generated by the "Food Delivery Battle" and the boom of instant retail has created invisible pressure for traditional e-commerce giants like Taobao. Taobao, backed by Alibaba's vast ecosystem, including Tmall Supermarket, Amap, Ele.me, Freshippo, and Alipay, has promising opportunities in the local life service sector. However, the coordination between different business units and the logistics efficiency within the last 3 to 5 kilometers remain key challenges that the platform must overcome to scale its instant retail business.

At present, Taobao Flash Sale appears to be a combination of Ele.me's original food delivery services and Taobao's previous "hourly delivery" feature, swiftly entering the competition to drive UV and user engagement. During the Labor Day holiday, topics such as #Taobao Flash Sale Crashed# even trended on social media platforms.

For Meituan, instant retail represents a new growth engine; For JD.com, it is a strategic lever to drive growth across its entire e-commerce ecosystem. Compared with the overt and covert competition between the two giants, the rapid launch of Taobao Flash Sale is more of a defensive move. Its long-term prospects remain to be seen. For now, all major platforms are still focused on strengthening infrastructure and optimizing operational efficiency, with instant retail shaping up to be a long-term battle.

About MoonFox Data

As a sub-brand of Aurora Mobile, MoonFox Data is a leading expert in data insights and analysis services across all scenarios. With a comprehensive, stable, secure and compliant mobile big data foundation, as well as professional and precise data analysis technology and AI algorithms, MoonFox Data has launched iAPP, iBrand, iMarketing, Alternative Data and professional research and consulting services of MoonFox Research, aiming to help companies gain insights into market growth and make accurate business decisions.

About Aurora Mobile

Aurora Mobile (NASDAQ: JG) established in 2011, is a leading customer engagement and marketing technology service provider in China. Its business includes notification services, marketing growth, development tools, and data products.

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