On-demand retail gaining ground
“For offline stores, the on-demand retail has greatly broadened the scope of their businesses.”
Philip Kuai
SHANGHAI: The fast-growing on-demand retail sector is expected to become an important component of the online-to-offline, or O2O, business landscape in which online marketing and online purchases drive offline operations and consumption, and play a bigger role in empowering offline retailers’ digital transformation, industry experts say.
On-demand retail refers to a retail model where shoppers place orders on online trading platforms, followed by retailers from brick-and-mortar stores executing door-todoor delivery themselves or through a third-party delivery platform.
An on-demand delivery order usually needs 30 to 60 minutes to be completed.
Traditional retailers seeking digital transformation now embrace the O2O model, as it provides a path of development that links online and offline channels to improve retailers’ operational efficiency.
This is according to a white paper released by leading on-demand delivery and retail platform Dada Group, the China Chain Store & Franchise Association and ecommerce giant JD’S Consumption and Industry Development Research Institute.
In recent years, the scale of the O2O market has continued to expand, exceeding 3.3 trillion yuan (RM2.2 trillion) in 2021.
In the meantime, the on-demand retail sector has grown significantly and become a strong driving force for the growth of the O2O segment, with its compound annual growth rate reaching 81% in the past five years, said the white paper.
The market scale of on-demand retail open platforms will exceed one trillion yuan (Rm659.72bil) in 2025, it added.
Dada Group is speeding up its layout in the on-demand retail segment, as part of its broader drive to empower the omnichannel development and digital transformation of offline retailers.
As of now, JD Daojia, the on-demand retail platform of Dada, and Shop Now – a one-hour delivery service jointly launched by JD and Dada – have a nationwide presence in over 1,700 counties and cities with a service coverage of more than 150,000 physical stores across all product categories.
Dada said that during the June 18 online shopping carnival, its total sales rose 77% year-on-year, while the number of users placing orders through Shop Now, a one-hour delivery service, soared 400% compared with the same period last year.
ecommerce giant Alibaba Group Holding Ltd has also jumped onto the bandwagon of on-demand retail through investing in food delivery platform Ele.me, grocery retail chain Freshippo and Taoxianda, an online grocery ordering platform.
“For offline stores, the on-demand retail has greatly broadened the scope of their businesses, while for brand owners, on-demand retail has built a digital marketing and operating ecosystem that connects online and offline channels,” said Philip Kuai, founder, chairman and CEO of Dada Group.
He Huijian, vice-president of JD and Dada Group, said that the core of retail lies in efficiency and experience, and on-demand retail is expected to grow into a trillion-dollar market in three to five years.
He said the company will continue to open capabilities in the industry to help partners realise digital efficiency.