Flash-express shows way to biz prosperity

"We are trying our best to provide customers with whatever they need. For instance, we finished an order for a printer at 10 pm one day when all the shopping malls and large supermarkets had closed. We will seize market opportunities and provide our customers with good shopping experiences."

Sun said an online convenience store with an area of around 200 square meters has a daily average turnover of over 10,000 yuan ($1,383), which is about 10 times that of a 70-square-meter convenience store.

According to Meituan's flash-express warehouse business department, after several years of rapid development, its flash-express warehouse has become the preferred convenient format for instant retail customers, and has developed to more than 6,000 warehouses in over 200 cities across China, with a daily order volume of over 2 million.

The surge of tourism in Harbin during the past winter season also brought Sun more sales volume, especially for stores near scenic spots and popular business districts.

"We received more orders from tourists, such as hot packs, portable power banks and data cables. The sales volume of bath towels, swimsuits and suitcases was also quite high. During the period, we introduced new items such as refrigerator magnets and local souvenirs, which were favored by tourists. The order volume during the winter tourism season doubled," he said.

Sun had, however, expected the orders to decrease significantly after the tourist season, but the reality was different.

"Currently, the order volume keeps steadily increasing with an average of 12,000 orders per store every month and 15,000 orders per month during peak periods. I think the new model has been accepted by more customers after the busy tourist season," he said.

Policy support

In fact, there are more market opportunities and support has been forthcoming from the government.

In May 2023, the local government released the "Implementation Plan for the Construction of Harbin's 15-Minute Convenient Living Circle", which encourages the establishment of new types of operating and distribution points represented by front warehouses, and the provision of convenient, rapid logistics and distribution services tailored to different customer needs.

"Meituan's flash-express warehouse business is a good attempt to transform the digital and intelligent business service industry, which can provide consumers with more convenient and personalized products and 24-hour instant delivery services," Ji Jingyan, deputy director of the Harbin municipal bureau of commerce, said at a city summit in November.

Sun is also confident about the prospects of his business.

"We have plans to open 22 Feixiang stores in Harbin this year, which will also create employment and entrepreneurial opportunities for more people," he said. "So far, we have recruited 20 youngsters, who are responsible for the daily online maintenance of the convenience stores, product big data analysis, and product selection."

"We also plan to open a central warehouse in Harbin where most of the goods will be stored, thus reducing stocking pressure on individual convenience stores," he added.

Wang Lili, a researcher at the Heilongjiang Provincial Academy of Social Science and director of its regional economic research office, said: "Relying on Meituan's online traffic, the business can get a stable customer base."

"Compared to common convenience stores or small and medium-sized supermarkets, flash-express warehouses have larger coverage radius and a wider range of goods," Wang said. "Operators should pay more attention to the selection of products to ensure quality and marketing promotion to expand the consumer market."

"However, the current high profits partly stem from Meituan's policy support and partly from the fact that the market supply is not yet saturated," she said. "When a large number of competitors enter the market and platform support policies disappear, there may be a situation of market saturation and declining profits."