Instant Retail Era: “Deterministic Increment” of Consumer Electronics

In the era of instant retail, consumer electronics brands and platforms are working together to explore new growth paths to meet consumers' desire for speed and convenience through efficient delivery and high-quality services.

The trend of “Everything Now” is blowing towards consumer electronics.

With Apple and Huawei launching their annual flagship new products, the technology world is still bustling in September this year.

On September 10, the two giants Apple and Huawei held new product launch conferences successively. The highly anticipated iPhone 16 series and the world's first three-fold screen mobile phone HUAWEI Mate XT Extraordinary Master were released together. Both were officially released on September 20.

On the day of the sale, the rush to buy on the official website was still intense, and there were still long queues in front of offline stores in Beijing, Guangzhou, Shanghai and other places. However, this year more savvy consumers chose another faster way - ordering takeout through mobile phones.

Meituan, Ele.me, Douyin, JD.com, Taobao and other platforms are competing for this market. The trend of instant retail featuring “delivery within hours” has already spread across the mobile phone industry. Consumers are also surprised by this convenience. On social platforms, there are many bloggers posting tutorials on how to buy new phones, such as “Meituan is gaining a lot of points!” and “Is Kuaishou’s business so comprehensive now?”

Image source: IC photo

In fact, the market for mobile phones delivered to customers has long been on the verge of an explosion. Chen Jia has been working in a mobile phone store in recent years. The two Apple authorized stores she has worked in both participated in the pre-sale of iPhone 15 on Meituan Flash Sale last year. She has also witnessed the increase in the proportion of store instant retail channels.

"For expensive electronic products like mobile phones, people used to worry that the products online might be fake, but now that the goods on the retail site come from well-known stores nearby, people are less worried."

Looking around, instant retail has become the central battlefield for consumer electronics brands to pursue new growth. The "Instant Retail Consumer Electronics Industry White Paper" (hereinafter referred to as the "White Paper") released by iResearch Consulting this year shows that the annual compound growth rate of the instant retail consumer electronics market size is expected to be 68.5% from 2021 to 2026, and its scale will exceed 100 billion in 2026.

Behind this is an all-round evolution of people, goods and places, and an efficient linkage of "delivery service - category - quality". Judging from the results, instant retail platforms have become the most popular choice for both brands and consumers. How come the sparks between consumer electronics and instant retail are getting stronger and stronger?

01 Who is using takeout to buy mobile phones?

A blogger on Xiaohongshu said that after missing the first wave of rush purchases after the iPhone 16 was first released, he almost thought he would miss the first release, but when he ordered takeout, he unexpectedly found that he could place an order. "I have been using Meituan for takeout for so long, and this is the first time I know that I can actually order a mobile phone."

According to media reports, the fastest order for this year's new iPhone on Meituan's flash sale took place in Ordos, Inner Mongolia. A local consumer placed an order at a nearby store as soon as the stock went on sale, and after only 10 minutes of waiting, he received a desert-colored titanium iPhone 16 Pro Max from the delivery boy.

Some people find it novel, while others have been accustomed to this way of consumption for a long time.

Seven years ago, when Wu Qingqing ordered takeout for the first time, she would not have known that this consumption method would be so deeply integrated into her life. From 2016 to 2023, she placed a total of 1,090 orders on Meituan, covering categories ranging from food delivery to emergency orders, household daily necessities, mobile phone accessories, and directly buying 3C electronic products on the takeout platform and even continuing to pursue new products.

Consumers' immediate needs will naturally extend to food, daily necessities, department stores, and consumer electronics, from rigid needs to non-rigid needs. Wu Qingqing's changing consumption patterns are actually a reflection of more young people today.

As the pace of life becomes increasingly faster, they are willing to pay for "emerging technologies" and "instant gratification", and their behavior in instant retail consumption also shows obvious solidarity, forming a solidarity consumption habit of "accessories - mobile phones - computers, digital products - home appliances".

Chen Bin from Shenzhen shared his takeaway consumption experience. He first bought a power bank when he was traveling and bought an iPhone 14 in May 2023. "The main reason was the discount and the direct delivery from the store."

Later, he also bought an air conditioner on the food delivery platform during the summer vacation, "because I had the experience of buying a mobile phone before, and it was a big platform that I could trust."

The White Paper concluded that compared with offline, instant retail users are significantly younger - in the field of consumer electronics, users born after 1990 account for 71%. As a veteran player in instant retail, the user composition of Meituan Flash Purchase also confirms this trend. Data shows that the penetration rate of Meituan Flash Purchase users born after 2000 has reached 48%.

This is a group that is willing to try new things and has higher overall purchasing power. They are also loyal followers of leading brands.

According to the survey, instant retail mobile phone users tend to replace their phones more frequently, with 8% replacing their phones within one year of purchase, and the average purchase price is 4,936 yuan. The replacement rate within one year for non-instant retail channels (express e-commerce and offline stores) is 4%, and the average purchase price is relatively lower, at 4,571 yuan.

To quote the conclusion in the White Paper, "Instant retail mobile phone users are less price sensitive and care more about brand, appearance and speed of delivery." Such a user matrix means an incremental market for brands that is different from traditional channels, and also means more potential scenario opportunities such as new phone releases and big promotion purchases.

02 Brands that have landed on the beach

In the past, for consumer electronics brands, express e-commerce and offline stores seemed to be two permanent obstacles in the channel system. However, the former's chronic problems were "complex preferential mechanisms" and "inconvenient returns and exchanges", while the latter had pain points of "high prices" and "incomplete products".

Take offline as an example, as the basic market of consumer electronics, it is of course indispensable. However, the marketing scenarios are single, there is no place to find young growth, and it is difficult to grasp user needs due to decentralized management, etc., all of which need to be optimized.

For example, most current consumer electronics brands rely on a large dealer system to expand terminal sales, but they cannot directly grasp the specific circumstances of each store or even each consumer, causing many troubles for brand management decisions.

Instant retail, which reshapes the upstream and downstream channels, has the advantages of "complete range of new product numbers, fast delivery, and convenient returns and exchanges". It also has the special promotional methods of e-commerce and short video platforms, thus creating a way out.

In addition to daily phone replacement and emergency response to damage, which are naturally suitable scenarios for urgent needs, more high-potential scenarios and marketing capabilities of instant retail channels are also being widely explored.

In other words, the core capability of instant retail is “speed”, but nowadays the reason for choosing it is “more than just speed”. In the scenario of new product release, users tend to pay more attention to the spot supply capacity and product richness of new products;

In the big promotion purchase scenario, users care most about platform discounts, gift benefits, etc. Richer service demands also allow brands to see more possibilities for instant retail platforms.

The "new scenario" label inherent in instant retail is indeed increasingly reflected in reality. Starting in 2023, mobile phone manufacturers such as Apple, Huawei, and vivo have successively released new products on Meituan Flash Sales. More than 75% of users received their new phones within 30 minutes, and the fastest new product experience speed reached 5 minutes and 36 seconds. In addition to Meituan, another food delivery platform also supported the pre-sale of new Apple phones for the first time this year.

These success stories show that although the consumer electronics market is mature enough, it still needs a channel that can make up for its shortcomings and provide full-link value in the areas of traffic expansion, precision marketing, and fulfillment services.

According to the White Paper, instant scenarios such as big sales, new product launches and gift consumption can bring potential growth of 17%, 20% and 16% respectively.

Consumers keep up with trends and deepen their demands, and brands also vote with their feet to keep up with supply.

This year, the number of Apple authorized stores that Meituan Flash Purchase cooperates with has increased from 4,700 in 2014 to 7,000, and has also expanded to cover more than 2,000 counties, districts and cities across the country, from first-tier cities to rural markets. In addition to major mobile phone brands, consumer electronics brands including Lenovo and Xiaotiancai are rushing to enter this new channel in all aspects.

03 A two-way "field"

Brands are pouring in, and as the platform that carries the demand, it is also constantly evolving.

Almost all platforms are working hard to match heavy resources and marketing methods to help manufacturers sell their "takeout mobile phones" better and better.

Taking the most representative Meituan Flash Sale as an example, this year it launched a 16-month membership benefit for every purchase of a new mobile phone (iPhone 16 series, Huawei Pura70 series, etc.). Consumers can receive it monthly and use it in local consumption scenarios such as take-out dining, food group buying, leisure and entertainment, etc.

It is worth mentioning that the God Membership is the comprehensive rights and interests system that Meituan has focused on upgrading this year. Matching it with the new phone sales scenario not only mobilizes the enthusiasm of the user group, but also indirectly reflects the platform's emphasis on consumer electronics brands and retailers.

At the fulfillment level, the combination of instant retail's mature transportation system and cloud warehouses can play a key role in the wider sinking market.

It is understood that in previous years, Meituan's flash sales of new products were limited to more than 1,000 stores in first- and second-tier cities nationwide. This year, the number of stores supporting the first batch of pre-sales has doubled compared to last year, and they are concentrated in third- and fourth-tier cities and some counties, towns and other sinking markets. For users in the newly covered sinking markets, the time to get new products in stock is significantly shortened.

In addition, the traditional shelf e-commerce platforms’ bargaining chips, such as interest-free installments and education discounts, have also been fully cashed in. In this Apple new product launch, various instant retail platforms provide users with up to 12 interest-free installments.

In Chen Jia's opinion, the most attractive thing about online shopping in daily consumption scenarios is the discounts that are close to consumer needs. She observed that as long as the platform offers discounts, the number of online orders from stores will surge, "which is a great help for our merchants to increase sales."

After the combined efforts of all parties, the normalized increase is visible to the naked eye. An Apple authorized store in Yunnan has been stationed in Meituan Flash Purchase since 2021. The store manager Xu Lin revealed that the store’s main sales force is currently online, with more than 60% of sales coming from instant retail. Sales on Meituan have doubled year-on-year this year.

Where consumers are, there are merchants. Today, Chen Jia has also truly felt the brand's concern for instant retail - "Leaders are also paying more and more attention to online sales, and they assess the packaging when sending out and the rate of favorable comments on the platform."

As instant retail has penetrated into people's lives, a common understanding in the industry has been since last year: "Instant retail is not emergency retail, but a highly certain lifestyle." Today, the era of "Everything Now" has arrived.

Users are changing, the boundaries between online and offline are merging, and industry leaders are jumping in. In the new "field" of instant retail, consumers, brands, and platforms have achieved mutual support and win-win results. For more brands and retailers, the sooner they get on this express train, the more likely they are to gain dividends and market share in the fierce competition.

At the request of the interviewees, "Chen Jia, Wu Qingqing, Chen Bin, and Xu Lin" in the text are all pseudonyms.