Duoduo Maicai, the grocery delivery unit of Chinese ecommerce giant Pinduoduo, is piloting self-operated warehouses in Shanghai as it prepares to enter the instant delivery market. The service is expected to launch in August, with Shanghai as its initial base before expanding to other cities.

The company is exploring partnerships with third-party same-city logistics providers, including Shansong and SF Express, to handle last-mile deliveries. The model aims to combine the operational efficiency of self-managed inventory with the flexibility of external couriers—allowing Pinduoduo to scale quickly without taking on heavy logistics assets.

The pilot is reportedly backed by a budget in the hundreds of millions of yuan and is being overseen directly by Pinduoduo’s co-CEO. It represents a strategic move to improve fulfillment speed while sticking to the company’s hallmark low-cost approach.

The initiative comes amid intensifying competition in China’s on-demand commerce sector. Meituan, the current category leader, achieved gross merchandise value of 250 billion yuan (US$34.5 billion) through its flash sales unit in 2024, fulfilling an average of 12 million orders per day. Its Sam’s Club front warehouses accounted for nearly half that volume, generating an estimated US$690 million to US$970 million in product-level profits.

While Alibaba and JD.com began investing in instant retail earlier, both have struggled with execution due to shifting priorities and coordination issues. Pinduoduo’s relatively late entry positions Duoduo Maicai as a challenger in a fast-maturing market—but one that’s still open to disruption, especially at the value-for-money end.

For Pinduoduo, which has built its core marketplace around low prices and rural user acquisition, success in instant delivery may hinge on whether it can translate those strengths into the faster, more logistics-intensive urban model.

🔗 Source: Netease Tech

🧠 Food for thought

1️⃣ China’s quick commerce market heats up amid projected trillion-yuan opportunity

Duoduo Maicai’s entry into instant delivery follows a broader industry trend where quick commerce in China is projected to reach RMB 1 trillion (approximately USD 137 billion) by 2025, growing at over 20% annually 1.

This market began in earnest around 2015 with JD Daojia and Alibaba’s Freshippo, but accelerated significantly during the COVID-19 pandemic when consumer behavior shifted toward online grocery shopping 1.

The move puts Pinduoduo in direct competition with Meituan, which has already established a strong position in the instant retail space through heavy investments in supply chain infrastructure 1.

Despite Pinduoduo’s previous statements about avoiding the instant retail battle, this strategic pivot suggests the company recognizes it cannot cede this rapidly growing segment to competitors.

The hundreds of millions of yuan budget allocation demonstrates a measured approach, avoiding the heavy asset investments that have challenged profitability for other players in this capital-intensive market 2.

2️⃣ Strategic logistics evolution reflects China’s delivery market maturation

Pinduoduo’s cautious front warehouse testing in Shanghai reflects lessons learned from China’s parcel delivery market, which has grown to become the world’s largest with over 50 billion deliveries annually 3.

Recent Pinduoduo developments