Instant delivery industry thrives in China

Nowadays, many people experience a day like this:

In the morning, they order breakfast with a single tap on their phones.

During work, they use express delivery for urgent documents.

Before leaving the office, they use a "runner" service to queue for them at a restaurant.

An unmanned food delivery drone works in Shenzhen, south China's Guangdong Province, Aug. 15, 2023. (Xinhua/Liang Xu)

From "food delivery" to "delivering everything," instant delivery services have become deeply woven into the fabric of everyday life in China. This is attributable to the country's rapidly growing instant delivery industry.

Data shows that the number of instant delivery orders in China reached 42 billion in 2023. The figure is expected to exceed 48 billion in 2024.

Unlike traditional delivery, instant delivery offers direct point-to-point services that instantly respond to the immediate needs of users, creating new opportunities in logistics.

The instant delivery industry has seen explosive growth since Meituan, China's leading online food delivery platform, was launched in 2013. Recent years have witnessed an increasing number of instant delivery platforms including Dada and SF Rush, which have accelerated the sector's expansion.

As lifestyles become increasingly fast-paced, the instant delivery industry has evolved beyond food delivery to encompass everything from daily necessities to electronics. One platform reported dramatic year-on-year growth in orders for goods including flowers, electronic gadgets, and home appliances in the past year, with average daily orders surpassing 10 million.

The service hours for instant delivery have also expanded. Dada NOW, an instant delivery platform under Chinese e-commerce giant JD.com, saw its proportion of average nighttime orders per day climb from 18 percent to 23 percent between 2019 and 2024, indicating a shift toward round-the-clock service.

In addition, instant delivery scenarios have been increasingly enriched, from delivering fresh groceries to running errands. During this year's eight-day Spring Festival holiday, SF Rush saw a 72 percent year-on-year increase in total orders for all-scenario intra-city instant delivery services.

China's instant retail sector, built on an instant delivery system, has injected a strong impetus into the promotion of consumption. According to a report from the Chinese Academy of International Trade and Economic Cooperation, the instant retail industry has grown over 50 percent annually on average since 2018, reaching 650 billion yuan (about $88.93 billion) in 2023 - up nearly 30 percent year on year. The sector is projected to exceed 2 trillion yuan by 2030.

Since its inception, the instant delivery industry has created numerous flexible employment opportunities. In 2020, delivery personnel for online orders was officially recognized as a new profession in China. Reports indicate that delivery workers earn an average monthly income of nearly 7,000 yuan. On Meituan's platform alone, the number of delivery workers surged from 3.99 million in 2019 to 7.45 million in 2023, maintaining double-digit annual growth on average.

"Instant delivery will play an increasingly crucial role in building '15-minute living circles' and improving the efficiency of the circulation of commodities," said Wang Yuehan, director of the Industrial Economics Research Department at the State Post Bureau's Development Research Center.

Ongoing urbanization is one of the major factors fueling market demand for instant delivery. In Heishan county, Jinzhou, northeast China's Liaoning Province, an increasing number of villagers are settling in the county seat, which, coupled with the rise of consumption in lower-tier areas, has driven rapid growth in local instant delivery orders. "Monthly order volume had exceeded 100,000 by the end of last year," said Guo Xiang, a SF Rush executive, noting that their service now covers over 1,200 counties.

"In recent years, China's urbanization rate has continued to rise, and the population density in some second and third-tier cities has continued to grow. This is expected to gradually unlock consumers' diverse demands for instant delivery," said Li Jiwei, executive director of the Meituan Research Institute.

Today's young consumers, who prefer value for money and convenience, are becoming the main force of new types of consumption, which has injected new impetus into the instant delivery market.

The rapid growth in instant delivery orders isn't only demand side fueled. It's backed by sophisticated and innovative smart delivery systems. According to Li, platforms have built real-time dispatch systems leveraging big data and artificial intelligence technology, which precisely match merchants, consumers, and delivery workers, calculating optimal routes in just 0.55 milliseconds for more organized and efficient delivery.

As instant delivery infrastructure continues to mature, it brings even more possibilities for the sector's growth with it.

"The use of drones for instant delivery offers users more efficient and flexible solutions," Guo said, adding that SF will leverage the advantages of drones, autonomous vehicles, etc. to expand into more scenarios of instant delivery, including the delivery of medical supplies and blood transportation.

"Looking ahead, the instant delivery sector still has tremendous growth potential, driven by the acceleration of new urbanization and rising living standards," Li said.