Is PDD entering the supermarket retail sector?

Author | Huang Yu

Editor | Wang Xiaojuan

In the past year, while Alibaba, JD.com, and Meituan have been fiercely competing in the instant retail battlefield, and almost all tech companies are going all-in on AI, PDD, known as a "dark horse," has appeared particularly quiet compared to its rapid advances in Duoduo Grocery and TEMU in previous years, neither heavily investing in AI nor pushing hard in instant retail.

However, beneath the surface, there are always undercurrents. It has been reported that recently, PDD is quietly conducting internal testing of a business called "Billion Dollar Supermarket" within its app, covering various categories of daily necessities such as fruits and vegetables, nuts and snacks, dairy and beverages, and maternal and infant products.

Relying on the already validated "Billion Dollar Subsidy" system, "Billion Dollar Supermarket" focuses on limited-time and limited-quantity coupon distribution and low-price subsidies, currently open for experience only to a select group of randomly chosen users.

Wall Street Insights learned from PDD's official customer service that "Billion Dollar Supermarket" does not have a separate secondary entrance but is embedded within the Billion Dollar Subsidy channel on PDD's homepage. Users entering the Billion Dollar Subsidy channel will find "Billion Dollar Supermarket" in the center of the screen, with two random full reduction coupons distributed daily during the event.

However, the PDD official customer service also revealed that the "Billion Dollar Supermarket" will upgrade its activities at 24:00 on January 11, and the entrance will be temporarily closed during the upgrade period, with the reopening time yet to be determined.

It is worth mentioning that several users have disclosed on social media that PDD had briefly tested the "Billion Dollar Supermarket" business in 2025.

As for the specific situation of the "Billion Dollar Supermarket" business, PDD has not yet responded to Wall Street Insights.

Testing the "Billion Dollar Supermarket" can be seen as an important exploration for PDD to replicate its successful "subsidy model" in low-frequency categories like 3C and beauty into high-frequency supermarket scenarios. Through the supermarket business, PDD can effectively enhance user activity and retention, achieving full-scene coverage of user needs.

"In the fierce competitive environment of instant retail, PDD's basic market in fast-moving consumer goods and lower-tier markets has indeed been significantly impacted," said retail e-commerce industry expert Zhuang Shuai to Wall Street Insights. By launching the "Billion Dollar Supermarket," PDD strengthens its advantageous categories in fast-moving consumer goods and reinforces user perception, which can help resist competition from Taobao Flash Sale, Meituan, and JD.com in the instant retail field, while also preparing to connect with offline physical supermarkets to expand instant retail business.

In fact, since last year, there have been ongoing reports that PDD is also laying out instant retail. In June last year, Wall Street Insights learned that Duoduo Grocery would launch instant delivery services in certain areas. However, with Meituan's withdrawal from the market, Duoduo Grocery also halted its experiments in instant retail, shifting its focus to capturing the market gap left by Meituan.

Recently, there have been reports that PDD is preparing for the next round of instant retail, building urban front warehouses in Beijing, Shanghai, Guangzhou, and Shenzhen (as opposed to suburban grocery warehouses), with a 50% chance of launching in the first quarter, and no later than the third quarter. However, this news has not yet been officially confirmed Regardless of whether PDD will enter the fiercely competitive instant retail sector, in today's e-commerce industry, which has entered a phase of stock competition, the cost of traffic is increasingly high. As a high-frequency necessity and a "traffic entry point," the supermarket category is clearly a business segment that PDD must pay attention to.

However, looking around, the supermarket retail sector in the e-commerce industry is already dominated by giants, and a "war of efficiency" is currently unfolding in the battlefield of instant retail.

Recently, Alibaba fired the first shot in the 2026 instant retail arena, boldly announcing that it will firmly increase investment in Taobao Flash Sale, aiming to achieve "absolute first place in the instant retail market." Under this goal, Tmall Supermarket and Hema undoubtedly bear significant responsibilities.

According to Wall Street News, Tmall Supermarket is focusing on accelerating upgrades in instant retail, partnering with Cainiao to continuously enhance Taobao Flash Sale services. It is expected that by the end of January, Cainiao will assist Tmall Supermarket in achieving comprehensive acceleration of Taobao Flash Sale services in 31 cities nationwide through the opening and expansion of Tmall Supermarket flash warehouses in multiple cities across the country, with the fastest delivery in 4 hours.

In addition, Hema's development is also rapid. On New Year's Day 2026, Hema CEO Yan Xiaolei released a letter to all employees, revealing that Hema's overall revenue growth rate exceeded 40% year-on-year in 2025, with Hema Fresh and Super Hema serving over 100 million consumers.

In 2025, Hema Fresh will enter 40 new cities, and Super Hema will open more than 200 new stores. Currently, Hema has nearly 500 Hema Fresh stores and 400 Super Hema stores nationwide.

At the same time, Hema is also becoming an important piece of the puzzle in the Taobao Flash Sale market. Data provided by Taobao Flash Sale shows that after Hema joined Flash Sale, daily order volume increased by over 70% year-on-year.

Under the catalysis of instant retail, the trend of "online and offline integration + supply chain efficiency improvement" is becoming increasingly evident.

As the number one competitor of Taobao Flash Sale, Meituan is also performing strongly in the supermarket sector. Currently, Xiaoxiang Supermarket is the focus of Meituan's efforts in supermarket retail. Meituan CEO Wang Xing clearly mentioned in the Q2 earnings conference that, in addition to takeout, Xiaoxiang Supermarket (online) is the most frequently used business.

At the end of last year, Xiaoxiang Supermarket officially opened its first offline store, filling an important gap in Meituan's offline layout and forming a three-tier structure of "Xiaoxiang Supermarket front warehouse + Xiaoxiang offline store + Happy Monkey" in supermarket retail.

JD Supermarket is also gaining momentum, having released a new strategy last September, proposing to increase its user base from 300 million to 500 million in the next three years.

Faced with these giants, it is clearly not easy for PDD to enter the supermarket sector.

Currently, the "100 Billion Supermarket" has not obtained an independent primary entry point on the App homepage, but is embedded within the 100 Billion Subsidy channel, making the entry deeper and unfavorable for users to form an independent "supermarket mindset." A deeper crisis lies in the fact that the competitive focus in the supermarket sector has shifted from simple traffic subsidies to a comprehensive comparison of supply chain, fulfillment efficiency, and service quality.

JD has a mature warehousing and distribution network, Alibaba has an instant delivery system, and Hema and Meituan have extensive offline coverage, while PDD's "100 Billion Supermarket" still faces challenges in product richness and fulfillment timeliness. How to fill the gaps in quality and delivery speed without sacrificing its core low-price advantage will be key to whether PDD can truly establish a foothold in the supermarket retail market PDD's greatest asset lies in its extreme cost control ability and its vast foundation in the sinking market.

In addition, PDD has a "Iron Army" team honed in the community group buying battle, which led DuoDuo MaiCai to surpass Meituan Youxuan in 2022, firmly securing the industry's top position. This supply chain capability, accumulated from community group buying, will become PDD's confidence in entering the supermarket retail sector.

The development trend of supermarket retail is already clear: this is no longer a one-dimensional game about who is cheaper, but a new revolution that reshapes the consumption habits of the entire population. Whether PDD will ultimately bring new variables to the industry remains full of uncertainty