Firmly committed to the ecosystem strategy: Ele.me's differentiated strategic 'open scheme'

Original @新熵 Author 丨 Jiang Li Editor 丨 Jue Ying

With the continuous development of the industry, instant e-commerce has expanded from a single category of food delivery to a diversified consumption scenario centered around home dining, radiating to more categories. Amid the rapid growth trend of the industry, how should platforms, merchants, and ecosystem participants stabilize their development path and carve out their own unique development routes? Recently, Ele.me provided its own firm answer.

On October 23, the "2024 Instant E-commerce Future Business Summit" hosted by Ele.me was held in Shanghai, exploring new business models for instant e-commerce platforms and merchants, and jointly building future community service capabilities, with the theme of "ecosystem" running throughout the event. At the summit, Ele.me CEO Han Liu clearly stated that in the face of the rapid development trend of instant e-commerce, all ecosystem participants should strive to create more innovative and collaborative business models. He also announced that Ele.me will firmly implement the "1+2" long-term strategy over the next three years and make strategic investments for merchants.

From this summit, Ele.me sent a clear signal: "Advancing with the ecosystem" is not just a slogan or attitude for this platform but a differentiated strategic choice based on its business values and underlying business model considerations.

New Three Years: Advancing with the Ecosystem

In recent years, with the growth in scale and the continuous expansion of imagination, instant e-commerce has become a new hotspot for brands rushing to find incremental growth.

The latest report from the Market Research Institute of the Ministry of Commerce shows: By 2023, the domestic instant delivery industry's order volume reached approximately 40.9 billion, a year-on-year increase of 22.8%, and the instant delivery market size was 341 billion yuan, a year-on-year increase of 24.8%. Currently, the instant e-commerce industry continues to maintain high compound growth, with an average annual growth rate of over 30%. It is estimated that by 2027, the instant e-commerce market size will exceed 5 trillion yuan.

Under the trillion-yuan market size, instant e-commerce platforms are ushering in a golden era. As consumers gradually develop online instant consumption habits, the instant e-commerce field, characterized by "all-weather, omnichannel, and short service radius," is building a thick snow and long slope.

▲ Image/Ele.me CEO Han Liu

In recent quarterly financial reports, Ele.me's GMV and order volume have shown significant growth, with losses continuously narrowing, demonstrating strong development resilience. Behind these achievements, in addition to the continuous improvement in the platform's organizational capabilities and strategic direction, the rapid development trend of the instant e-commerce industry has also played a catalytic role.

In March 2024, Alibaba Group CEO Eddie Wu announced in an internal letter that Ele.me's chairman would be succeeded by Trudy Dai, CTO of the Local Life Group, and the CEO would be succeeded by Han Liu, head of Fengniao Delivery.

At the beginning of their tenure, the new management clearly stated that they would remain steadfast in the platform's strategic direction of "openness" and "ecosystem" and also disclosed Ele.me's "New Three Years" strategy and direction to the market.

In Alibaba's financial report for the first quarter of fiscal year 2025 (the second quarter of the natural year 2024) disclosed in August this year, Ele.me's orders showed significant growth, with unit economic benefits significantly improved and transaction scale continuously expanding.

The new management's first report card for the "New Three Years" started successfully, proving that Ele.me has entered a virtuous development track and also verifying the smooth transition of the development route of "promoting technological innovation and advancing with the ecosystem" during the handover between the old and new management teams.

"1+2" Strategy: Breaking Boundaries

At the beginning of the "New Three Years," Ele.me internally refreshed the core value it provides to merchants with the terms "retention" and "profit growth." In the process of thinking about how to help merchants turn "traffic" into "retention" and "order growth" into "profit growth," the new management anchored the core strategic plan for the next three years.

At this forum, Han Liu reiterated the strategic layout of the "New Three Years." He stated that over the next three years, Ele.me will firmly implement the "1+2" long-term strategy and make strategic investments for merchants.

Among them, "1" represents Ele.me's goal to become a healthy growth, consumer-savvy home dining platform; "2" represents focusing on building two new tracks: "instant retail with Ele.me characteristics" and "an instant logistics network for market value extension."

Ele.me Senior Vice President and Head of Same-City Retail Business Hu Qiugen stated at the event that Ele.me will continue to strategically invest in instant retail, firmly advancing with the ecosystem for mutual benefit, and resolutely not competing with merchants for supply chain profits.

Hu Qiugen stated that as part of the Alibaba ecosystem, Ele.me will resonate and collaborate with Taobao, Alipay, Amap, and other platforms to break the time and space constraints of instant retail fulfillment, better helping merchants serve consumers and creating a new paradigm of "time-space" scenario operations.

Kantar Insights Chief Market Research Director Wang Yading believes that instant e-commerce represented by Ele.me is creating more possibilities for brand business growth—through innovative scenario insights, creating new species, breaking through population penetration boundaries in food and retail, and targeted city marketing explosions, the development of instant e-commerce has the opportunity to bring structural new growth to brand merchants.

In fact, instant e-commerce has been continuously expanding its boundaries in recent years. In addition to the foundational food delivery business, the penetration rate of physical goods such as supermarkets, pharmaceuticals, and cakes and desserts has been rapidly increasing. iResearch believes that with the continuous cultivation of consumption habits and the improvement of supply levels, instant e-commerce channels will become the first choice for consumers when temporary needs arise.

With the "1+2" strategy, Ele.me is actively seeking to achieve mutual benefits with brand merchants and jointly explore new boundaries in consumer experience and operations.

Near-Field Official Flagship Stores: The Future Has Arrived

At this summit, Ele.me announced the continued upgrade of "Near-Field Brand Official Flagship Stores" for retail brand merchants and revealed plans to open 100,000 official flagship stores in the next three years.

According to Hu Qiugen, through brand official flagship stores, brand merchants will have greater operational autonomy and control over their instant e-commerce business. Ele.me will also better help merchants improve operational efficiency, break the time and space constraints of instant e-commerce transactions, and bring structural growth opportunities to merchants.

Traditional brand retailers urgently need transformation. As an innovative D2C (direct-to-consumer) front for new brands in the instant e-commerce trend, Ele.me's increased focus on near-field brand official flagship stores is undoubtedly timely.

In the view of Ele.me Vice President and Head of Retail Brands and Supermarket Convenience Industry Chen Yanfeng, many brands without physical stores in the past lacked direct communication channels with consumers and were unable to precisely target consumer needs. Near-field official flagship stores can simplify direct service and circulation channels for brands, improve channel profitability, and bring sustainable growth.

Nielsen IQ retail research data shows that in the first half of 2024, the overall sales of fast-moving consumer goods in omnichannel increased by 1.9% year-on-year, with online retail growing by 9.6% and offline physical retail declining by 2.2%. Traditional retail channels are undergoing reshaping, with large offline retail formats and comprehensive e-commerce facing significant pressure, while small near-field formats represented by convenience stores have become important engines.

At this summit forum, Mengniu Group's Daily Fresh, which piloted the brand official flagship store as early as June 2023, had more to say. As one of the first brands to join, Mengniu achieved independent distribution coverage for near-field retail through the socialized supply chain capabilities provided by the official flagship store.

Mengniu Sales General Manager Chen Jiangchun believes that with the supply chain advantages of near-field official flagship stores, brands can build private domain operation bases and truly achieve user retention. As the store operator, brands can control product pricing and achieve long-term price stability.

Industry analysis suggests that Ele.me's new format of brand official flagship stores may break the time and space constraints of instant commerce, better directly connect and operate consumers, serve consumers, and achieve integrated online and offline inventory management, becoming an important solution for retail brands to embrace change.

At the same time, Ele.me has also launched the "Surge Plan" for home dining, investing 1.5 billion yuan in special funds to help catering brand merchants improve digital capabilities and drive business growth.

Ele.me Merchant Ecosystem President Lei Yanqun stated at the summit that over the next three years, Ele.me will use the data accumulation of digital CRM to help merchants accelerate the construction of membership systems, improve consumer operations and management, and assist merchants in digital applications.

Under the differentiated underlying strategic considerations of the "ecosystem route," whether it is the "1+2" strategy or near-field brand official flagship stores, they are all bold attempts by Ele.me in the "New Three Years" to join hands with more merchants and ecosystem participants to navigate cycles and achieve high-quality growth. This new giant ship carrying industry expectations has already set sail.