Over the past year of food delivery warfare, the battlefield for instant retail has shifted from visible consumer subsidies to warehouse stores scattered across cities. Counting stores in renovation and operational ramp-up phases, the online supermarket format "Taobao Convenience Store," launched less than nine months ago, has already established around 800 locations. This scale places it on a similar level to Meituan's lightning warehouse business "Squirrel Convenience." Taobao Flash Purchase's ambitions extend beyond this. The target for Taobao Convenience Store is to reach 3,000 stores by the end of the fiscal year in March 2027. However, Taobao Flash Purchase is not building a traditional convenience store network reliant on street-side foot traffic. All Weather Tech has learned that as an online supermarket-style instant retail format under the Taobao Flash Purchase system, the main warehouse type for Taobao Convenience Store averages over 10,000 SKUs per warehouse, covering categories like daily necessities, alcohol and snacks, and beauty and personal care. These online supermarket-style flash purchase warehouses primarily handle online orders, achieving 30-minute delivery through dispersed urban locations and pre-stocked inventory. Compared to traditional convenience stores, their operations rely more heavily on product turnover, inventory management, and fulfillment efficiency. However, Taobao Flash Purchase does not heavily undertake operational tasks; instead, it delegates venue investment, stocking, and daily operations to partner merchants and service providers, connecting to existing social warehouse and distribution networks in an "asset-light" manner. This model allows Taobao to quickly fill near-field supply at a low cost, but whether a warehouse network run by partners can form stable product offerings and fulfillment capabilities remains to be seen.
Exchanging Traffic for Shelf Space
Although named "Taobao Convenience Store," it is a fundamentally different business from roadside convenience stores. A source close to Taobao Flash Purchase revealed that Taobao Convenience Store was launched in October 2025, primarily expanding through collaboration with regional merchants. The platform provides merchants with category planning, pricing guidance, selection capabilities, and supply chain support, while service providers handle regional city recruitment and subsequent operational support. Taobao Convenience Stores have no fixed appearance. In Beijing, it might be a flash purchase warehouse hidden in a non-street-facing location, handling only online orders; in a county town, a merchant might open a retail complex spanning hundreds of square meters, including made-to-order categories like tea drinks and cooked food alongside packaged food and daily necessities. Behind this "thousand stores, thousand faces" approach lies Taobao Flash Purchase's extremely open, even somewhat loose, partnership model. Taobao Flash Purchase currently provides four main types of resources: traffic portals from the Taobao App and multiple ecosystem positions, supply sources including 1688 and brand collaborations, the Aoxiang SaaS system with dedicated operational support, and various subsidies including special funds. Partners retain significant operational autonomy, not only being able to "join with their existing store" but also simultaneously connecting to competing platforms like Meituan and JD.com. For merchants already operating lightning warehouses or supermarket convenience stores, meeting Taobao Convenience Store's audit standards allows them to complete the initial transformation simply by connecting to the system, adjusting some product structures, and adding an online store portal. Recruitment personnel's pitch to potential franchisees is even more direct: "Friends who already run other lightning warehouses or supermarket convenience stores can upgrade to Taobao Convenience Store for free and receive subsidies." Taobao Convenience Store also reduces merchants' operational pressure through payment terms and fee reductions. Recruitment information shows that some products can enjoy payment terms of up to 98 days, allowing merchants to sell first and settle payments later; it also offers commission reductions, logistics discounts, and digital tool support. Taobao Flash Purchase aims to use 1688 and Tmall brand resources to provide a curated product pool for warehouse stores, reducing operators' costs in finding suppliers and testing new products. However, considering that the same product selection may not suit all regions, service providers and warehouse stores can still supplement regional products based on local consumption habits. The source close to Taobao Flash Purchase told All Weather Tech that Taobao Convenience Store's profitability relies more on the expansion of the entire ecosystem's transaction scale and improved operational efficiency, rather than charging high fees or shifting costs to individual merchants. For merchants, this is a low-barrier entry solution. From Taobao's perspective, it uses traffic and subsidies to gain a shelf scene physically closer to consumers.
According to the platform's recruitment plan, Taobao Convenience Store currently plans three types of warehouses: flagship warehouses over 800 square meters, standard warehouses over 400 square meters, and campus warehouses over 150 square meters. According to Retail Business Finance, standard warehouses need to reserve about 100 square meters, and flagship warehouses about 300 square meters, to accommodate 2,000 to 3,000 brand SKUs coordinated by the platform. All Weather Tech learned from sources close to Taobao Flash Purchase that in the brand lease-consignment business model, partner merchants mainly provide storage and sorting services, earning service income from these activities without bearing the inventory risk for the corresponding products. Taobao Flash Purchase has previously attempted more instant fulfillment of original brand products in the near field. In September 2025, Tmall launched the "Instant Purchase" service, with over 260 brands including Decathlon, Midea, and Purcotton accessing Taobao Flash Purchase through flagship stores or authorized specialty stores. For example, Decathlon connected its Tmall flagship store with its 208 offline stores nationwide, using the stores as fulfillment points for instant retail orders. However, not all brands have such dense offline networks. Taobao Convenience Store can play the role of such a near-field shelf. Imagine a scenario: at 10 PM, a consumer discovers their long-used brand of diapers at home has run out, and the nearby supermarket doesn't have the same brand and size. Such demands have clear brand and specification preferences, making it difficult to find temporary substitutes. If this product could be purchased instantly through the lightning warehouse's brand supply, the consumer wouldn't have to wait for next-day express delivery. This elevates Taobao Flash Purchase's value to brand merchants, allowing it to secure a place in the instant retail fulfillment chain for branded goods.
Attack and Defense Differences
Taobao Convenience Store's ability to expand rapidly in a light manner is, to some extent, leveraging the social warehouse network that Meituan has cultivated over many years. Over the past few years, relying on traffic, delivery, and warehouse support, Meituan has expanded its lightning warehouses to over 50,000. However, most of these warehouse stores are operated by third parties, limiting the platform's control over supply. As subsidies recede and the industry enters a phase of stock competition, operators are more willing to access new platforms to share costs. Several regional merchants told All Weather Tech that over the past year, under the influence of food delivery subsidies, the order structure between Taobao Flash Purchase and Meituan for some warehouse stores has narrowed from about 20-80 to 30-70, with some areas approaching 40-60. For Meituan, relying solely on traffic and fulfillment makes it difficult to form a stable, controllable supply. It has shifted from simply expanding warehouse scale to strengthening control over product selection, supply chain, and store operations. In April this year, Meituan upgraded its supply chain service platform "Flash Bang Bang," proposing to improve warehouse stores' product quality, procurement efficiency, and operational capabilities; simultaneously, through strongly controlled brands like Squirrel Convenience, it is increasing direct control over store operations. Meituan has also provided an independent search portal and offers on its main app for its own convenience brand "Squirrel Convenience," and strengthened the "official self-operated" label on some store pages. For Meituan, the value of directly getting involved is not just about increasing revenue. Guo Ben, an early operator of lightning warehouses, told All Weather Tech that as merely a traffic and fulfillment platform, although Meituan can see user and order data, it's difficult to fully grasp the selection logic of third-party warehouse stores, and the feedback loop from frontline store operations back to the platform is longer. Through directly operated or strongly controlled stores, Meituan can directly verify selection and operational methods, then attempt to extend the experience to a broader warehouse network. Meituan previously experimented with a similar path in its own alcohol lightning warehouse "Wa Mai Song Jiu": screening high-frequency items based on order data, then co-developing channel-exclusive products with liquor companies, extending control to procurement and production. However, alcohol's SKUs are relatively limited and highly standardized, while a comprehensive convenience store's product selection is much more complex. Guo Ben pointed out to All Weather Tech that some of Squirrel Convenience's current product selection still mainly references items already validated by other leading warehouse stores, and its ability to independently discover new products and define assortments has not been fully proven. Zhang Shukun, a FMCG supplier who has long supplied lightning warehouses, also stated that the main reason for developing private labels in lightning warehouses is to reduce brand premiums and increase channel gross profit, but except for easily standardized categories like beverages, most players haven't yet developed the channel recognition and product development capabilities similar to Hema. Deeper involvement in store operations will also change the relationship between Meituan and social warehouses. As of the end of March this year, Squirrel Convenience's store count exceeded 700. In the comprehensive convenience lightning warehouse market with few thousand-store brands, Squirrel Convenience has entered the industry's forefront. Third-party warehouse stores' orders are highly dependent on the platform. Once Meituan develops its own strongly controlled brand, whether traffic, subsidies, and activity resources will be tilted towards Squirrel Convenience inevitably becomes a concern for operators. Taobao Convenience Store is exploiting this gap. It doesn't need to catch up with or compete head-on with Meituan in warehouse network scale and fulfillment capabilities; it only needs to attract social warehouses to also access Taobao with a lower entry barrier and an "I won't directly operate" stance to quickly supplement retail supply. For Taobao Flash Purchase at this stage, the expansion of warehouse store supply relates to both unit economics and the retail landscape. Compared to food delivery, retail orders typically have higher average order values and wider categories, helping to dilute fulfillment costs and improve unit economics. If instant retail can also increase the opening frequency of the Taobao App, driving advertising, e-commerce transactions, and member spending, the investment per single order can also be absorbed by other value consumers create within the Taobao ecosystem.
Stability Challenges Ahead
Today, Taobao can attract warehouse stores originally serving Meituan with traffic and subsidies. Tomorrow, competitors can use the same method to guide warehouse stores to allocate more inventory, staff, and activity resources to other platforms. Non-exclusive partnerships, opaque warehouse store operations, and uneven operational capabilities – these are precisely the issues Meituan is trying to address by strengthening control, and they are also the tests Taobao cannot bypass. Although product spoilage in lightning warehouses is lower than in fresh produce front-line warehouses, this doesn't mean it's a business that can be run loosely. Currently, the third-party lightning warehouse market remains fragmented, partly due to consumers' limited loyalty to warehouse store brands. Users care more about whether needed products are nearby, whether prices are low enough, and whether delivery is fast enough. "Having what others don't, being cheaper than others" remains a key competitive rule. This determines that warehouse stores must not only pursue scale but also continuously optimize selection, inventory depth, purchase prices, and replenishment speed. These links require strong coordination capabilities, which is the most difficult part to supplement under Taobao Convenience Store's weak control model. Guo Ben believes that different service providers have uneven operational capabilities, and store performance is prone to significant fluctuations. A rapid increase in signed contracts does not equate to the formation of stable, standardized supply. "Warehouse stores in different regions may use different product selections and procurement channels. Product prices, inventory depth, and replenishment efficiency are difficult to unify. Some operators may even rely on subsidies to maintain orders and daily operations," Guo Ben said. The supply system is another challenge. Zhang Shukun told All Weather Tech that lightning warehouses currently commonly use a hybrid model combining central warehouses, regional distributors, and express delivery. Central warehouses can aggregate the procurement needs of scattered warehouse stores, helping the platform negotiate directly with brands, and then complete replenishment through regional allocation. "For Taobao Convenience Store, building a large central warehouse is the only option to reduce costs," Zhang Shukun said. Without this link, products often need to go through regional distributors or distribution logistics, and multi-layer circulation will push up procurement costs and extend replenishment cycles. However, in an open cooperation model, a central warehouse cannot cover the entire product selection of warehouse stores. In addition to the brand products coordinated by the platform, warehouse stores in various regions will still procure regional brands, local bestsellers, and temporarily out-of-stock items on their own. Taobao Convenience Store actually faces two coexisting systems: platform-unified supply and warehouse store independent procurement. Both systems ultimately appear under the same "Taobao Convenience Store" entrance, but consumers will not distinguish who procured the goods. For example, a carton of milk coordinated by the platform can be traced to a unified supplier and batch number; another product temporarily replenished by the same warehouse store from a local wholesaler requires the operator to self-record the purchase voucher, expiry date, and storage process. Once self-procured goods have problems like expiry or improper storage, the actual responsibility may lie with the partner merchant, but consumers will first see and complain about "Taobao Convenience Store." For Taobao, eager to fill its near-field network, 3,000 stores is just a scale starting point; how to maintain supply and quality control standards without significantly making the model heavy is the real test for the next phase.
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