Officially launched "Hour Reach", what are the odds of Oriental Selection to seize the instant retail market?

On April 8, Dongfang Selection officially launched the "Hour" service and launched it on the Douyin "Dongfang Selection Hour" account.

Dongfang Selection's "Hourly Delivery" business is first aimed at the Beijing market, and has established cooperation with 17 front-end warehouses, covering 80% of the area within Beijing's Fifth Ring Road, and will cover more cities in the future. The launch of the "hourly delivery" service means that consumers who purchase Dongfang's self-operated products will enjoy faster product delivery services, which greatly shortens the time from placing an order to receiving goods.

Source: Internet

It is reported that at 3 p.m. on the same day, the "Oriental Selection Hour" account launched a live broadcast for the first time, with an audience limited to users in Beijing, selling about 50 self-operated products, including a number of popular popular products. Among them, Dongfang Selection Roast Sausage has sold 6.604 million orders in Douyin stores, and Dongfang Selection has sold 3.342 million orders of low-fat fried chicken breast.

E-commerce platforms are accelerating their shift to an e-commerce ecosystem

On the morning of April 9, after trying to place an order, the reporter found that at present, the "Hourda" business can only be ordered on Douyin, and the Dongfang Selection App has not yet been launched.

In this regard, Dongfang Selection's customer service said that the "hour" business is currently only launched on Douyin. According to the relevant interface, the "Oriental Selection Hour", which was launched in Beijing for the first time, mainly sells its own products, including grilled sausages, chicken breasts, etc.

In fact, before the official launch of the "Hour Delivery" business, in late February this year, Dongfang Selection had tested the waters. During the trial phase, the business will only be open to some streets in Beijing's Shilihe area and Shanghai's Hongkou and Xuhui districts.

"The 'hour' business can be regarded as an intensive cultivation and in-depth excavation of Dongfang Selection's own brand private domain. In the view of Yu Miao, the founder of Susu Consulting, Oriental Selection is not an e-commerce platform with a low unit price, as a knowledge blogger and content e-commerce, Oriental Selection has a group of loyal fans.

Pan Helin, a well-known economist, believes that the launch of the "hourly delivery" business means that Dongfang Selection is transforming from an e-commerce platform to an e-commerce ecosystem, and wants to open up the situation in local services and instant delivery business.

According to the data of Cicada Mother, the first live broadcast of "Oriental Selection Hours" on April 8 had a cumulative sales of 50,000-75,000 yuan.

It is also reported that on April 8, the launch of "Hour Delivery", the share price of Oriental Selection fell by more than 9%, and it has fallen by more than 70% compared with the high point of the stock price.

In this regard, some industry insiders believe that if Dongfang Selection wants to boost the stock price, it needs Beijing's "hourly" business to fight a good battle, enhance market confidence, and make the stock price recover;

Instant retail has great potential and great competition

Instant retail is a retail model that provides consumers with fast delivery services within 1 hour or even 30 minutes by relying on the Internet and digital platforms.

Dongfang Selection's landing of the "hourly delivery" business is a specific measure to lay out the instant retail market. Relevant data shows that in March 2024, "Walking with Hui" will be the first place on the monthly list of Douyin talents, and "Oriental Selection" will rank sixth.

At the same time, referring to the data of the Ministry of Commerce, in 2022, the instant retail orders will exceed 40 billion, and the market size will reach 504.286 billion yuan, and the market size is expected to reach three times that of 2022 in 2025. The "2023 Instant Retail Development Trend White Paper" also shows that it is expected that by 2030, the instant retail market will increase to 3.6 trillion yuan, equivalent to 6% of the total retail sales of consumer goods in the same period.

Obviously, instant retail is considered to be a blue ocean with a market size of trillions and continues to maintain a high growth rate. However, it must be noted that at this stage, the major giants continue to increase the instant retail track, and the competition in this market is becoming increasingly fierce.

For example, in August last year, Meituan announced that it had reached a cooperation with SF Express, Flash Delivery, and UU errands, and in December last year, its Meituan Maicai was upgraded to Xiaoxiang Supermarket, cutting from fresh food categories to more supermarket categories.

In terms of Alibaba, in November last year, Ele.me announced the launch of the "Double Hundred Plan", working with 100 retail brands to achieve 100% growth in two years. In addition, Alibaba's Hema and Tmall supermarkets have accelerated their layouts.

In terms of JD.com, it released a new instant retail SaaS system in September last year, and in October last year, it proposed a three-kilometer business model for instant retail.

In terms of Douyin, as a representative of "new players", in October last year, Douyin Mall launched an independent entrance to the "Hour Delivery" business, which covers 10 categories such as fresh vegetables, fruits and flowers, meat, eggs and aquatic products, leisure snacks, mobile phone digital, and genuine medicines.

It's not easy to get in, and it's even harder to grab the beach

Oriental Selection's first mention of the "hour" business comes from its interim report for fiscal year 2024.

According to the report, in 2024, Dongfang Selection will cooperate with third-party logistics providers to carry out front-end warehouse pilots in first-tier cities such as Beijing. Achieve faster, more cost-effective shipping by setting up a front-loading warehouse and complete the order-to-delivery process in less than two hours.

"Dongfang Selection does not lay out infrastructure in the field of local life, such as real-time delivery personnel, but adopts a platform approach. Pan and Lin analyzed that the competition for such platforms has been very fierce, and at this stage, it is very difficult for Dongfang Selection to enter the game and get a piece of the pie. However, the advantage of Dongfang Selection lies in the asset-light and platform, even if it is not successful, the cost is not large.

From the point of view of the business distribution of Dongfang Selection's "Hour", it chose to test the waters in Beijing and Shanghai, and first launched it for the Beijing market, which just collided with instant retail service providers such as Freshippo, Meituan, and JD.com, which have been deeply cultivated in the local area for many years. Whether it can get a piece of the pie in the highly competitive market, the prospect of Dongfang Selection seems to be unclear.

In this regard, Yu Miao said that although there is a certain business conflict with other instant retail service providers, first-tier cities are also the easiest places for Dongfang to reach.

"Dongfang Selection's move is also for the purpose of deep integration of the supply chain. Yu Miao said that through the development of a new "hour" business, Dongfang Selection is making efforts and layouts for its transformation to an e-commerce platform. "To enter a new market, Dongfang Selection must first achieve business reach. Of course, for a long period of time, there will be huge differences in volume and operation between Dongfang Selection and the existing instant retail service providers. ”

According to the data, as of 10 o'clock on April 9, the number of fans of the "Oriental Selection Hour" account was 89,000, compared with other accounts in the Oriental Selection Department, there is still a large gap in the number of fans. (Comprehensive Beijing Business Daily, Logistics Times Weekly, Beijing Youth Daily)