(Yicai) April 16 -- Chinese on-demand services heavyweight Meituan officially rolled out its instant retail service Meituan Shangou yesterday while e-commerce giant JD.com said it plans to hire over 50,000 full-time delivery riders as both companies raise the stakes in China’s highly competitive instant retail space, where online orders are delivered from nearby physical stores, often within minutes.

Meituan launched its instant retail business internally, back in 2018 and it already handles over 18 million non-food orders per day. By the end of last year, Meituan Shangou had partnered with more than 5,600 large retail chains.

Instant retail is a major growth driver, and Meituan’s delivery income soared 19.3 percent last year from the year due to the increased transaction volume, according to the Beijing-based firm’s latest annual report.

Meituan’s instant retail performance has exceeded expectations, Meituan founder Wang Xing said. There is still huge growth potential in all the towns, counties and cities where the services are available. The company is planning to make further upgrades to expand the market penetration of instant retail.

JD.com’s hiring spree is part of the firm’s aggressive push into the instant delivery sector. The Beijing-based company has already made several moves to expand its footprint. On April 1, it merged its logistics affiliate Dada Nexus into a wholly owned subsidiary. And in May last year, JD.com integrated its instant retail business under the revamped brand ‘JD NOW.’

The rebranding of Meituan Shangou aims to boost public awareness and improve its organizational focus amid intense competition from JD.com, said Zhuang Shuai, founder of Bailian Consulting.

This rebrand marks a strategic upgrade and could help Meituan stand out from JD.com due to its different approach, said Chen Liteng, analyst at digital economy website 100EC.

As platforms continue to up the ante, the instant retail market could be set for a shake-up this year, Chen said. Intensified competition between Meituan, JD.com and Douyin’s one-hour delivery service is driving innovation in areas such as the organization of front warehouses and multi-capacity delivery coordination. With new tech advances such as drone deliveries and AI-scheduled routing, a ‘half-hour’ delivery will become the industry standard.

Meituan is also going head to head with JD.com in the food delivery sector and rolled out a new support scheme for the catering industry this week. Meituan has pledged to invest CNY100 billion (USD14 billion) over the next three years to support the food sector. The funds will be used to help restaurants offer consumer discounts and reward top-performing vendors as well as to upgrade brick-and-mortar restaurants, Xue Bing, general manager of Meituan’s takeout business, said on April 14.

Editor: Kim Taylor