LatePost Exclusive | Taobao Convenience Store to Launch as Taobao Flash Sale Begins Brand Upgrade
Pulling Brand Merchants into Flash Sales — Starting from Infrastructure
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Six Months After Taobao Flash Sale’s Upgrade
Since Taobao Flash Sale’s major upgrade on April 30, half a year has passed amid fierce takeaway wars.
- In food delivery, platforms now focus on increasing average order value.
- In instant retail, each Taobao business unit is exploring its unique strengths.
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Launching the “Taobao Convenience Store”
Taobao Flash Sale is preparing to launch a chain convenience brand called Taobao Convenience Store:
- 24/7 Operation
- Wide product range: general merchandise, snacks, beverages, 3C electronics, baby & maternity, beauty
- ~10,000 SKUs — ~3× richer than typical convenience stores, equal to half a Walmart’s catalog
- Essentially an online-only boutique general store
Business model:
- Taobao Flash Sale will not open physical stores or keep inventory.
- Operates via brand authorization, providing merchants with:
- Platform endorsement
- Traffic support
- Product selection assistance
- Supply chain resources
- Delivery capabilities
- Merchants must meet strict standards:
- 24-hour operations
- Fast picking times
- Low problem-order rates
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From Lightning Warehouses to Convenience Stores
Currently, Meituan and Taobao Flash Sale each have around 15,000 integrated lightning warehouses:
- Purely online supermarkets
- 5,000+ items
- Often located in low-rent spaces (basements, backstreet shops, residential units)
- Fulfill most non-food instant retail orders
The new “Taobao Convenience Store” is positioned as an upgrade to this lightning warehouse model.
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Why This Matters
Challenges with existing lightning warehouses:
- Increasing price wars
- Heavy reliance on white-label products
- Low repeat purchase rates
- Thin margins
Taobao’s goal:
- Select high-quality merchants
- Set benchmarks for service & product quality
- First batch: ~30 partnership slots
- 2025 target: 200 cities, 2,000 stores
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Why Start with “Taobao Convenience Store”?
Industry has explored instant retail in:
- Fresh food
- Pharmaceuticals
- Alcohol
- Beauty
Timeline:
- Meituan began in 2018 → built lightning warehouse model with partners over 7 years
- Ele.me and JD pursued similar hourly-delivery strategies
This year’s 200M+ daily takeaway orders boosted growth in all instant retail segments.
- New fast-growing categories: apparel, snacks, personal care
- Home & apparel: now second-largest category in Taobao Flash Sale’s instant retail
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Key Insights from Taobao
> “Consumers are trained to expect anything in 30 minutes. Many search for specific brands or better products, but warehouses lack them — that’s the opportunity.”
Challenges for merchants:
- Upgrading product quality & customer experience independently is difficult
- Price competition is easier, but unsustainable
Taobao’s solution:
- Select top merchants
- Offer Taobao Convenience Store endorsement
- Provide stocked product guides, traffic boosts, supply chain resources, system capabilities
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Merchant Requirements & Controls
Entry & evaluation metrics:
- Service: picking time, 24-hour ops, financial strength
- Product quality: out-of-stock rate, return rate, problem order rate
Store rights & control mechanisms:
- Merchants manage inventory, but Taobao may:
- Remove high-return products
- Penalize repeated complaint issues
- Revoke qualifications for safety breaches
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Pilot Collaborations
- Brand sends samples to Flash Warehouse sellers
- If successful, brands scale inventory & deliver to Taobao’s central warehouses
- Platform allocates them to local warehouses strategically
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From White-Label to Brand — Following Pinduoduo’s Path
Flash Warehouses:
- Purely online, 24/7
- Edge: fast supply chain feedback (multiple daily stock updates)
- Weaknesses: high delivery costs, uneven quality, low repurchase rates
Early merchant experience (2021):
- 30,000 RMB startup, 400 SKUs → monthly revenue 50–60k RMB
- SKU quantity was key; 8,000 SKUs could yield strong returns
- Rising competition → duplication of popular SKUs ("traffic bait" items)
White-label dominance:
- 80% of SKUs white-label; 20% of revenue but most profit
- Drives homogeneous competition
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Industry Transformation
Pinduoduo:
- Started with white-label goods
- Subsidized brand products to reshape image
Flash Sales shift (2024):
- Meituan pivot: quality over quantity
- Launching brand merchant flagship warehouses
- Added procurement platform
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2025 Outlook:
- NetEase Yanxuan: licensing brand to Flash Warehouse agents
- Agents operate stores, manage stock, choose locations
- Some convenience chains (Sinopec, PetroChina) moving in
Food delivery competition investments → strong brand interest
Yet instant retail as a daily choice is still emerging.
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AI & Instant Retail — Parallel Infrastructure Shifts
Tools like AiToEarn官网 act as digital infrastructure for:
- AI-powered content creation
- Cross-platform publishing (Douyin, YouTube, Facebook, etc.)
- Analytics & model ranking
- Similar to Flash Warehouses in retail — connecting and scaling operations
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AiToEarn — For Creators & Sellers
- Open-source content generation
- Simultaneous publishing to major platforms (Douyin, Kwai, WeChat, Bilibili, Xiaohongshu, Facebook, Instagram, LinkedIn, Threads, YouTube, Pinterest, X/Twitter)
- Real-time performance tracking & AI model ranking
Resources:
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Cover Image: Moneyball
