Alibaba (9988.HK), Huitongda Network (9878.HK), and Wanchen Group (300972.SZ) are all jumping on this “new trend” with accelerating development
During Alibaba's (9988.HK) earnings call on August 29th, CEO Eddie Wu explicitly identified two strategic opportunities for Alibaba: a technology platform centered on "AI + Cloud", and a large-scale consumer platform integrating shopping and lifestyle services. Wu emphasized, "Alibaba's approach to instant retail isn't focused on competing in a single consumer category, but rather on meeting the one-stop needs of billions of consumers, shaping the business model of a large-scale consumer platform in the AI era."
Coincidentally, Huitongda Network (9878.HK), a strategic investment by Alibaba, released its interim results on August 28, also emphasizing the implementation of its "AI+" strategy, as well as expressing its intention to tap into new consumer subsegments such as "hard discounts" and "instant retail". Wanchen Group (300972.SZ), another company specializing in retail bulk sales, staged a strong limit-up last Friday.The convergence of technology and new consumption, integrating elements such as hard discount and instant retail, heralds the emergence of a “new trend”.
Alibaba made a strategic investment in Huitongda in 2018, and remains a key strategic shareholder and the company's largest institutional shareholder. In August of this year, Alibaba Cloud and Huitongda signed a comprehensive full-stack AI collaboration, focusing on "AI + Industry" development in lower-tier markets. Targeting 300 million households and 4.7 million township mom-and-pop stores, the two companies will jointly develop and deploy multiple AI agents to expand their customer base and transaction volume, simultaneously improving urban and rural circulation efficiency and monetizing the industrial and retail data from lower-tier markets.
On "instant retail", Alibaba and others have set off a trend of "flash sales" and "instant delivery" in the higher-tier markets; and Huitongda, being one of its investments, is leveraging its deep understanding of the lower-tier markets, combining digitalization and supply chain capabilities to transform some traditional rural businesses into new retail terminals with online ordering and door-to-door delivery.
It is conceivable that in the future, after the full cooperation on AI, Alibaba and Huitongda will replicate the "instant retail" model in the lower-tier markets.
On the other hand, "hard discount" has also become a buzzword for many platforms in the large consumer sector.
“Haoxianglai”, a brand under Wanchen Group, has rapidly expanded its snack sales business, with over 10,000 stores and surging performance across its revenue and net profit. Its stocks hit the daily limit after opening on August 29. Huitongda, which owns 250,000 member stores, also mentioned in its financial report for the same period that it will focus on expanding the "hard discount" category to meet the needs of a wider customer base.
Analysis indicates that with the thrust of AI, the consumer market is accelerating its evolution toward high-frequency, full-scenario, and diversified experiences.
