In Shanghai, Yongxin Li, a 26-year-old social media manager, taps her phone screen, and within 30 minutes, a Dior lipstick arrives at her doorstep. "I love getting beauty items delivered, it’s so convenient," she says.
The instant retail market for personal care is projected to achieve a compound annual growth rate of 47 percent by 2027, with its market value soaring beyond $23.7 billion. This growth trajectory significantly outpaces that of other retail channels, according to a 2023 white paper on instant retail published by Meituan in collaboration with Unilever and Kantar.
This isn't just about faster delivery. “By delivering products swiftly, brands can enhance customer satisfaction and loyalty, creating a seamless and positive shopping experience from purchase to delivery.” says Carol Chan, Managing Director at cross-border marketing agency Comms8.
“With premium and secure delivery services that guarantee an almost real-time product arrival, customers are more willing to spend on higher value items as the worries of the parcel going missing is eliminated.” she adds.
Instant retail is another step into creating the seamless, end-to-end personalized experience that extends the in-store customer service to the online realm.
Speedy Sephora
Beauty giant Sephora, a subsidiary of luxury conglomerate LVMH Group, was one of the first retailers to make use of China’s instant retail channels. The French beauty retailer has launched instant retail services in all its stores across China.
According to Xinhua, Sephora’s sales skyrocketed by 1,243 percent during this year's Qixi Festival, also known as Chinese Valentine's Day, compared to a typical day a week prior, with numerous consumers opting to purchase cosmetics through instant retail as gifts for the occasion.
More retailers are now offering luxury products for instant retail offerings. Research by Jing Daily on delivery platform Meituan shows a range of high-end items from Dior and Chanel, including lipsticks and fragrances, available for instant delivery. Prices for these products range from $43 to $143, with an average delivery cost of $0.80.
A range of high-end Dior and Chanel products, such as lipsticks and fragrances, are available for instant delivery on Meituan. Image: Meituan
Chan points to strategic partnerships between logistics companies and luxury giants, such as SF Express and LVMH Group, as crucial in enhancing delivery efficiency and adopting sustainable practices. These partnerships signify a shift in brand strategies, where logistics teams are increasingly seen as critical touchpoints for maintaining brand image and customer satisfaction.
For example, JD has a dedicated delivery service called JD Premium Delivery (京尊达) for high-end product delivery, complete with a luxury vehicle and a well-dressed delivery crew.
What’s more, the Chinese government is supporting plans to extend instant retail services beyond major urban hubs to smaller counties and rural regions. This strategy involves rolling out enhanced instant retail services in these areas to spur consumer spending, which is essential for the growth of the world's second-largest economy.
“The development of instant retail will help accelerate the digital transformation of the traditional retail industry, spur spending and create more jobs,” said Du Guochen, deputy director of the Chinese Academy of International Trade and Economic Cooperation, a think tank under the ministry of commerce.
Challenges and opportunities
However, the transition to instant retail is not without its challenges. Luxury brands must navigate the delicate balance of maintaining exclusivity while embracing the speed and accessibility of instant retail. The environmental impact of increased deliveries also calls for innovative solutions, such as eco-friendly packaging and sustainable delivery methods.
Chan emphasizes the high consumer expectations in China. "In 2023 alone, over 120 billion parcels were delivered in China," she says, highlighting the scale and efficiency of the country's logistics network.
The wider instant delivery market, which also includes food and drink delivery, is valued at $49 billion in 2022, is projected to exceed $140 billion within the next five years, a testament to its growing importance, according to a report by Horizon Insights. In China, instant delivery for food and drink happens on the same apps as instant delivery.
Instant retail resonates particularly with Gen Z consumers like Yongxin, who seek convenience, immediacy, and personalized experiences. The lifestyle of this demographic, marked by a growing preference for digital solutions and a departure from traditional urban living, aligns with the instant retail model.
As seen through Sephora’s successful entry and the availability of luxury beauty items on platforms like Meituan, instant retail in luxury is happening now and is likely to continue growing. "In the end, I usually go for what’s most convenient," Yongxin concludes.