Core Viewpoint - Watsons Group, under Li Ka-shing, is continuously reducing its store count in China, reflecting a strategic shift in response to declining performance in the region [2][4]. Financial Performance - In the first half of 2025, Watsons Group reported a revenue of HKD 6.666 billion in China, a year-on-year decrease of 3% [2][3]. - The EBITDA for the same period was HKD 117 million, down 53% compared to the previous year [2][3]. Store Count and Sales Performance - The number of stores in China decreased by 145, representing a 4% reduction year-on-year [4][6]. - The year-on-year sales growth rate for stores in China improved from -18.6% to -1% [4][5]. Strategic Adjustments - The reduction in store count is part of a strategy to optimize the store portfolio, closing underperforming locations upon lease expiration [6]. - The company is increasing its online fulfillment capabilities, with the number of micro-fulfillment centers rising from 131 to 394 [6]. Regional Performance - Other regions, such as Asia and Europe, are performing well, with significant growth in sales and store counts, contrasting sharply with the decline in China [3][5]. - In Asia, store count increased by 796, with a sales growth rate of 6.4% [5]. Employment Trends - The number of employees in Chengdu Watsons has decreased from 1,582 in 2022 to 1,204 in 2024, indicating a trend of workforce reduction [8]. - Similarly, in Chongqing, employee numbers have also shown a continuous decline from 600 in 2022 to 501 in 2024 [10]. Overall Strategy - The company is adopting a dual strategy of closing inefficient physical stores while expanding its online and warehousing capabilities to enhance competitive advantage amid pressures from e-commerce and local beauty stores [11].

Core Viewpoint - The article discusses the resurgence of the "takeaway war" in China, highlighting significant discounts and promotions offered by major platforms like Meituan and Taobao Flash Purchase, which have led to a surge in consumer orders and impacted delivery riders and merchants [1][26][30]. Group 1: Promotions and Consumer Behavior - On July 12, platforms like Meituan and Taobao Flash Purchase issued large discount coupons, leading to a spike in consumer interest and orders [1][13]. - Consumers reported paying as little as 0.01 yuan for drinks due to these promotions, with some transactions showing discounts of up to 22.4 yuan [5][9]. - The hashtag FreeMilkTea trended on social media, indicating widespread consumer engagement with these promotions [2]. Group 2: Impact on Delivery Riders - Delivery riders experienced a significant increase in order volume, with some reporting daily earnings exceeding 1,000 yuan due to the high number of orders generated by the promotions [25][26]. - The influx of orders led to reports of riders completing up to 200 deliveries in a day, showcasing the intense demand created by the promotional activities [26][27]. Group 3: Merchant Challenges - While consumer orders surged, many merchants struggled to keep up with the demand, leading some to temporarily remove items from their menus due to overwhelming order volumes [27]. - Reports indicated that some merchants faced operational challenges, with long wait times for customers and overwhelmed staff [27][29]. Group 4: Competitive Landscape - The article notes that the competition among platforms has intensified, with Meituan and Taobao Flash Purchase both launching aggressive promotional strategies to capture market share [30][31]. - Alibaba announced a plan to inject 50 billion yuan into consumer and merchant subsidies over the next 12 months, indicating a strong defensive strategy against Meituan [31]. - Analysts predict that the ongoing competition will pressure overall industry profitability, with platforms needing to balance high delivery costs against consumer incentives [34][36]. Group 5: Future Outlook - The article suggests that the future of instant retail will depend on the platforms' ability to integrate supply chains and enhance delivery capabilities, particularly for non-standard products [37][38]. - The market for instant retail in China is projected to reach 1.2 trillion yuan by 2024, with the top three players' market share declining from 82% in 2020 to 67% [38].

Core Insights - The "2024 China Supermarket Top 100" report indicates that the total sales scale of the top 100 supermarket companies is approximately 900 billion yuan, reflecting a year-on-year growth of 0.3% [1][2] - The total number of stores has decreased to 25,200, representing a year-on-year decline of 9.8% [1][2] - Among the top 100 companies, 42 reported an increase in sales, while 25 saw an increase in the number of stores; 14 companies experienced growth in both sales and store numbers [1][2] Company Performance - Walmart (China) continues to lead the Top 100 with sales of 158.8 billion yuan [2] - Other top companies include: - C. P. Group (RT-Mart, Super RT-Mart, M Membership Store) - Hema (Hema Fresh) - Yonghui Superstores - Wumart [1] - Notable sales growth was observed in companies such as Costco, Chipotle Technology (Hotmaxx), Yao Di, and Aldi [2] Market Trends - Membership and discount stores continue to show significant growth in both sales and store numbers [2] - The overall number of stores in the Top 100 has decreased by 2,750, but sales have improved due to various corrective measures [2] - More than 60% of companies have improved their store performance, particularly those with sales between 3 billion and 10 billion yuan, which represent the highest proportion [2] - The share of online retail sales is increasing, with online sales accounting for 16.9% of total sales in 2024, highlighting the growing importance of front warehouses in boosting online sales [2]

Core Insights - The competition in the instant retail market has intensified, with Meituan and Alibaba launching aggressive subsidy campaigns to capture market share [2][5][11] - Alibaba announced a direct subsidy of 50 billion yuan to consumers and merchants over the next 12 months, while Meituan responded with significant coupon distributions [2][4] - The rapid increase in order volumes indicates a shift in consumer behavior and heightened competition among platforms [5][9] Group 1: Company Strategies - Meituan's daily order volume for instant retail surpassed 120 million, with non-food orders showing significant growth [5][9] - Alibaba's Taobao Flash Sale reported over 80 million orders within three days of launching its subsidy program, with a focus on enhancing its local service capabilities [5][6] - Both companies are leveraging their existing platforms to drive traffic and improve conversion rates, with Alibaba integrating Ele.me into its local services strategy [5][6] Group 2: Market Dynamics - The instant retail market is characterized by a high frequency of orders, with Meituan's non-food category growing at a rate of 23% year-on-year [5][6] - High delivery costs are expected to pressure profitability across the industry, as platforms compete for user acquisition through subsidies [6][11] - The market share of the top three players has decreased from 82% in 2020 to 67%, indicating increased competition and fragmentation [11] Group 3: Consumer Behavior - Consumers are benefiting from the competitive landscape, with reports of increased order volumes and promotional offers leading to a surge in demand for various products [8][9] - The influx of orders has created challenges for merchants in fulfilling demand, highlighting the need for efficient logistics and delivery systems [8][9] - The competition has empowered merchants, allowing them to negotiate better terms with platforms due to increased options [9][10]

Core Insights - Meituan's flash purchase service has reached an average daily order volume of 13 to 14 million, with a peak of 18 million orders in a single day [1] - The potential inclusion of "invisible riders" could push Meituan's instant retail orders close to 15 million [2] - The order volume has surged over 30% in just six months since surpassing the 10 million mark in Q3 2024, indicating a growth rate that significantly outpaces the industry average [3] Group 1: Business Model Evolution - The transition from physical stores to front warehouses has been crucial for Meituan's flash purchase service, which initially aimed to digitize offline stores [5] - Meituan has incentivized offline merchants to join its platform with substantial discounts, absorbing the costs to drive traffic online [6] - The emergence of "flash warehouses" has restructured product offerings, pricing, and operations to better cater to online orders, leading to significant operational breakthroughs [9] Group 2: Instant Retail Models - There are three primary models for instant retail: physical stores, integrated store-warehouse models, and front warehouses [13] - Physical stores have seen limited success in instant retail, with many generating only a few orders monthly, while flash warehouses have shown superior performance [14][11] - Successful examples like Aoleqi demonstrate that physical stores can excel in instant retail by effectively managing inventory and optimizing product offerings [15][17] Group 3: Transition Strategies for Retailers - Retailers should adapt their business models based on order density, with higher densities favoring front warehouse models [34] - The integrated store-warehouse model serves as an initial upgrade for many retailers, allowing them to balance online and offline sales [35] - As order density increases, the advantages of front warehouses become more pronounced, prompting many retailers to shift from integrated models to front warehouses [36] Group 4: Future of Instant Retail - The evolution of instant retail is expected to lead to faster, more efficient, and diverse service offerings, with advancements in technology such as unmanned delivery and warehouses [44] - Retailers are encouraged to establish independent organizations for managing front warehouses to enhance operational efficiency [42]