From pursuing massive warehouse expansion to focusing on efficient warehouse operation, major players are locked in cutthroat competition in the front-warehouse sector.
The front-warehouse model, which the industry repeatedly questioned "whether it can make a profit" only a few years ago, has become a key strategic direction that Meituan, Alibaba and JD are all deploying in 2026.
On one hand, warehouse networks are expanding rapidly across urban maps nationwide; on the other, daily necessities, consumer electronics and even beauty and personal care products are being placed in small warehouses surrounding residential communities, enabling "delivery in as fast as 9 minutes".
Yet behind the bustle, there seems to lie a harsh reality: when warehouses are deployed densely enough, simply competing on the number of warehouses has long lost its meaning.
This is no longer a simple "territory-grabbing race", but a long-term tough battle centered on the depth of supply chains, the extreme efficiency of individual warehouses, and the humanistic warmth at the urban last mile.
Writer / Yubai
Article Architect / Jiajia
Produced by / Giant Finance
01 The second half: the competition lies in the last few hundred meters
In the second half of instant retail, all the fierce competition is concentrated in the few hundred meters closest to users.
According to calculations by the Academy of Commerce of the Ministry of Commerce, the scale of China's instant retail market will exceed 1 trillion yuan in 2026. Non-food categories such as daily necessities, alcoholic and non-alcoholic beverages, consumer electronics, and personal care and health products feature high purchase frequency, rigid demand and relatively high unit price, which are regarded by many platforms as key directions to build user stickiness.
To deliver these products to users' doorsteps within 30 minutes, the front warehouse is the only ultimate node that cannot be bypassed.
As a result, the capital moves in 2026 are so intensive that the whole industry is exhilarated.
On February 5, Meituan took the lead and acquired the China business of Dingdong Maicai with an initial consideration of 717 million US dollars. On August 20, Jiang Fan, CEO of Alibaba E-commerce Business Group, clearly stated at the earnings communication meeting that it will accelerate the integration of Freshippo and Tmall Supermarket, and focus on promoting the front-warehouse model.
In just over half a year, the three giants have mobilized heavy resources and pointed to the same direction simultaneously.
This means that the competition logic of instant retail has undergone a thorough change: The "shallow game" driven by traffic has come to an end, and the "hardcore fulfillment era" with deep supply chain and refined operation as the core has officially arrived.
In the past, platforms competed on subsidies, red envelopes and advertising slots. Now when users open the app, they do not care about the marketing stories you tell, but only one thing: can the order be delivered within 30 minutes, are the products correct, and is the quality stable.
Traffic can be purchased, but fulfillment capabilities cannot.
02 Fierce head-to-head competition: the open strategies of Meituan, Alibaba and JD
Facing the same end point, the three giants have launched completely different commercial tactics.
Meituan is characterized by "cultivating both internal and external capabilities". Internally, it ramps up the development of product strength and strictly controls product quality; externally, it outputs traffic, site selection services and digital tools to franchisees to achieve common development.
Its target of building 100,000 Lightning Warehouses by 2027 was even officially confirmed in September 2026 to be completed ahead of schedule.
Meituan's goal is straightforward: to serve consumers in a wider range with extreme warehouse density.
Alibaba's core move is Freshippo's "store-to-warehouse transformation". Since restarting the front-warehouse model in August 2024, Freshippo has rapidly transformed its existing stores, and the number of front warehouses has surged from 200 at the end of 2025 to more than 500 by mid-2026, heading straight for the 1,000 mark by the end of the year.
In Jiang Fan's battle plan, non-food instant retail is highly expected. He predicts that its transaction volume will surpass that of the food delivery category in the next fiscal year; in the longer term, instant retail is expected to contribute 30% of the platform's total transaction volume and become the second growth curve for e-commerce.
Alibaba is fighting a make-up battle that it cannot afford to lose.
JD is playing its trump card of "self-operated supply chain + dedicated delivery speed". It pre-stores high-value products such as digital products, home appliances and beauty products in front warehouses in advance, and realizes delivery in as fast as 9 minutes with its instant delivery riders; at the same time, it opens up its fulfillment capabilities to the whole industry through the "Instant Delivery Warehouse" system.
JD does not only compete on the number of warehouses, but on the quality certainty of "fast and reliable" in the minds of users.
In October, Freshippo quickly entered Xiamen, Quanzhou and other cities, while conveying a clear signal: it does not pursue unrealistic national-scale numbers, but focuses on the real penetration of individual stores in each city.
The three take different paths, but share the same underlying logic: Use high-frequency instant demands to rebuild the shortest path between users and products. The one that stays closer to users will have more opportunities to define the next retail entry.
03 After density, the major test is how to survive
At this stage, a question naturally arises: how much can the number of warehouses still explain?
The prevailing judgment in the industry is that the number of warehouses is only an admission ticket, far from the finish line.
When the warehouse network covers the whole city, what determines life and death is the extremely cruel operation account.
First comes the critical algorithm line for accurate stock preparation. The inventory of front warehouses is extremely low: stocking one extra unit leads to loss, while stocking one less unit leads to stockout. The high turnover requirement of fresh produce and the wide variety of non-food categories force all players to push their demand forecasting algorithms to the extreme.
Second is the break-even warning line of 1500 orders per warehouse per day. Precise calculations by Huatai Securities reveal a harsh truth: a single front warehouse must reach an average of 1500 daily orders and an average order value of 75 yuan to barely get a meager operating profit margin of 0.4%.
What does 0.4% mean?
It is almost a profit that can be blown away by a gust of wind. If any link has slightly lower efficiency, higher loss or more customer complaints, the account will not balance.
This means that, blindly expanding density without corresponding order volume support will turn every newly opened warehouse into a black hole that devours capital.
Finally comes the ultimate delivery of quality and trust. Speed is of course important, but when users place their trust in front warehouses to buy mobile phones and beauty products, "shopping with peace of mind" is the fundamental reason for user retention.
The one who can convert the depth of supply chain into quality certainty for users can laugh last. Therefore, the front-warehouse model is not a scale game, but an extreme value game. If the single-warehouse model cannot be operated profitably, the larger the scale, the faster the capital loss.
04 Hardcore fulfillment with humanistic warmth
Up to now, the front-warehouse business is no longer a simple retail business. It places warehouses in communities, compresses waiting time to minutes, and converges scattered demands into an undercurrent of instant fulfillment.
What the giants are really competing for is no longer the number of warehouses, but the ability to turn warehouses into part of the city.
Therefore, the end point of the front-warehouse model does not lie in the warehouse itself. When it evolves from a closed, privately-owned territory of enterprises to a shared, open distributed urban retail node, it is no longer just a fulfillment tool, but a new generation of end facilities following parcel lockers: inconspicuous in daily life, but determining the life efficiency of the whole city.
Warehouses are nodes, and the city is the ultimate answer.
But infrastructure never only pursues efficiency. It also needs to address fairness, trust and dignity. The platforms that can go far in the long run are those that not only convert the depth of supply chain into quality certainty, but also convert the speed of algorithms into consideration for people.
The number of warehouses determines the admission ticket, operation efficiency determines survival, supply chain determines the upper limit, and humanistic warmth determines how far you can go. The end point of the front-warehouse model is not to be faster, but to make speed sustainable, trustworthy and human-centered. This is the new era answer for hardcore fulfillment.
Part of the reference materials:
1. Break out of the takeaway attrition war: JD and Alibaba heavily bet on front warehouses, non-food instant retail takes the key responsibility to drive the breakthrough of the e-commerce industry
2. Meituan: Plans to acquire 100% equity of Dingdong Maicai's China business for 717 million US dollars
3. JD Instant Delivery front warehouses have achieved full coverage in cities including Beijing, Shanghai and Chengdu
4. Freshippo that returns to expansion still has shortcomings to make up
5. Wang Puzhong of Meituan: The target of 100,000 Lightning Warehouses and 200 billion yuan GMV will be completed ahead of schedule
This article is from the WeChat official account "Giant Finance" (ID: jutoucaijing), written by the Editorial Board of Giant Finance, and authorized for release by 36Kr.