Core Insights - The service retail industry is predicted to see an online penetration rate increase to 25% by 2030, with the emergence of 300 thousand-store brands [2] - Meituan's strategy is shifting towards instant retail, aiming to expand its small supermarket chain to all first- and second-tier cities, while also focusing on the non-standard service retail market [2][3] - The service retail market is projected to reach 7 trillion yuan by 2024, with a compound annual growth rate (CAGR) of 8% from 2021 to 2024, while the online segment is expected to grow at a CAGR of 38% during the same period [2][3] Market Dynamics - Meituan's investment in AI technology aims to reduce labor costs and enhance service efficiency, with the introduction of AI digital employees for merchant operations [3] - The AI assistant team includes roles such as customer service representatives and operational specialists, which have already shown significant improvements in customer retention rates across various industries [3][4] - The service retail sector has the potential to create more jobs, with the National Bureau of Statistics reporting an average annual increase of 7.41 million jobs in the service industry over the past decade [3] Industry Challenges and Opportunities - The service retail sector has historically faced low online penetration rates due to the complexities of non-standard services, but Meituan aims to address these challenges through improved efficiency and technology [4] - Meituan has already partnered with over 630,000 merchants in the service retail industry, with a year-on-year order volume growth of 77% since 2024 [4][5] - The company recognizes the untapped potential in lower-tier cities, where service retail businesses have shown substantial growth after joining online platforms, with a compound annual growth rate of over 90% in transaction volume since 2022 [5] Strategic Outlook - Meituan's focus on service retail is seen as a necessary pivot as growth in the food delivery segment slows down, with the service retail market being significantly larger yet less penetrated [5] - The company is expected to continue refining its approach in the service retail sector, leveraging AI and human resources to enhance operational efficiency and customer service [5]