Why O2O Home Delivery Could Replace Your Refrigerator: Insights from Suining Retail Research

Market Expansion of O2O Home Delivery

The O2O home‑delivery market has grown dramatically, turning online grocery purchase into a rigid demand, especially after the pandemic, and is seen as a huge commercial opportunity that could even "replace the refrigerator".

Research Methodology

Suining Retail Technology Institute conducted extensive surveys and in‑depth interviews with more than ten senior leaders from leading O2O platforms, covering product selection, supply chain, logistics and technology.

Key Findings

Business Model Importance

Choosing the right commercial model is crucial; O2O home delivery links online orders with store or micro‑warehouse fulfillment and 1‑hour delivery to the consumer.

Order Volume and Growth

During the pandemic, top fresh‑food O2O platforms saw order volumes triple. A major retailer (referred to as A) reached 880 orders per store per day in November and 800 in December, with a peak of 7,800 orders on a single day.

Supply‑Chain and Profitability

Average order value rose from ¥61 in 2019 to ¥100‑120 during the pandemic. Profitability becomes feasible when daily orders exceed 1,000 per store with a gross margin around 28%.

Store and Delivery Fulfilment

Self‑operated platforms achieve higher repeat‑purchase rates and lower acquisition costs than third‑party channels. Delivery cost is about ¥7‑7.3 per order; reducing this cost improves overall profitability.

Three Critical Success Factors

Target Audience : Focus on young consumers (born in the 80s, 90s, 00s) who are willing to pay delivery fees.

Commercial Zone Selection : Choose densely populated, young‑demographic areas to support high order density.

Business Positioning : Position the service as "replacing your refrigerator" with instant ordering and delivery.

Practical Recommendations from Suining

After acquiring Carrefour China, Suining accelerated its home‑delivery share to nearly 10% within a quarter, launched a 1‑hour, 3‑km "same‑city" service, and built an integrated "store‑warehouse" supply chain.

For traditional retailers, a "self‑operated + platform" model with 1‑hour, 3‑km coverage, a curated SKU range (~500 items), and partnerships with local services (e.g., laundry, car wash) can drive repeat purchases.

Optimising delivery timing, offering transparent pricing, and leveraging data‑driven marketing are essential to balance cost and user experience.

Future research will explore order flow, product supply chain, store fulfilment and delivery fulfilment in greater depth.