The Entry of JD.com and Taobao Accelerates the Decline of "Flash Express"

In October 2024, Flash Express (NASDAQ: FLX) debuted on the Nasdaq with an IPO price of $16.50 per share, becoming the second independent instant delivery platform to list on the U.S. stock market after Dada. At that time, its “one-to-one urgent delivery” model was regarded as a unique competitive advantage against industry giants. Founder Xue Peng confidently claimed a “decade-long leadership brand” as the company’s moat.

However, the first annual report post-IPO revealed early signs of struggle: total revenue for 2024 was 4.468 billion yuan, marking a 1.35% decline year-over-year; the fourth quarter saw a net loss of 294 million yuan, reversing from profit in the previous year. By the first quarter of 2025, order volume had further decreased by 11.8% quarter-on-quarter to 58 million orders. As of May 23, 2025, the stock price had fallen to $2.34, an 85.8% drop from the IPO price, with market capitalization shrinking to $160 million.

Behind this market rejection lies the collapse of Flash Express’s growth model amid fierce competition from players such as Meituan, JD.com, Taobao, SF Express, and Didi, who collectively divide the local lifestyle market. Particularly, as Flash Express’s differentiation based on “speed, safety, and reliability” became diluted, the fragility of its business model was fully exposed.

This situation invites a deeper analysis of why a company that disrupted the industry ten years ago with its “30-minute delivery” promise now struggles within the instant retail wave. Is its dedicated delivery model a genuine moat protecting high-end service, or is it a constraint on expansion? Has the ecosystem formed by Meituan, JD.com, Taobao, and SF Express accelerated Flash Express’s decline?

Reviewing Flash Express’s financials from Q4 2024, the full year 2024, and Q1 2025, the company’s performance trend is clearly downward, with some key indicators signaling challenges beyond short-term fluctuations.

Firstly, order volume contraction and revenue decline stand out.Despite a marginal 1.3% revenue decrease in 2024 to 4.468 billion yuan, order growth slowed dramatically—total orders in 2024 reached 277 million, only 2.4% higher than the previous year, compared to 17.8% growth in 2023. Q4 2024 orders dropped to 65.8 million, a sequential decline. Revenue fell 14.9% year-over-year in Q4 to 1.029 billion yuan, reflecting continued erosion in average revenue per order.

Notably, Flash Express’s average order value (total order amount divided by order volume) declined from 16.71 yuan in 2023 to 16.13 yuan in 2024, indicating diminished spending power among core customers.

This strategy of sacrificing price for volume did not reverse in Q1 2025, as order volume fell 11.8% year-over-year alongside a 13% revenue drop, signaling that price competition was hitting diminishing returns.

On the cost side, operating expenses spiraled dangerously.

Q4 2024 operating costs soared 179.5% year-over-year to 256 million yuan, with sales and marketing expenses increasing 93.4% to 90.3 million yuan, administrative expenses surging 234.4%, and R&D expenses spiking 315%. Flash Express attributed much of this growth to immediate recognition of cumulative stock-based compensation expenses related to the IPO.

Although rider compensation as a percentage of revenue cost decreased from 90.5% in 2021 to 85.4% in H1 2024, labor costs showed clear rigidity and upward pressure.

Equally concerning is the underinvestment in R&D and the hollowing out of technology. Despite Flash Express announcing in February 2025 integration with Deepseek’s large AI model, its impact has yet to appear in financial results. Order matching efficiency and rider dispatch costs still lag behind industry leaders, revealing the company’s “technology-driven” claim as superficial.

According to Retail Business Finance, Flash Express’s current market crisis stems largely from systemic failures of its business model amid industry transformation, rooted in internal structural flaws and exacerbated by external ecosystem shifts. Going forward, any advancement in intracity delivery or local lifestyle services will likely deal further blows to Flash Express.

The inherent flaw of its “one-to-one urgent delivery” model lies in exchanging order density for premium pricing.

As an independent third-party instant delivery platform, Flash Express has lacked stable business support since inception: it neither benefits from high-frequency consumption scenarios (like Meituan Flash Purchase, JD Instant Delivery, Ele.me, Taobao Flash Purchase) that provide reliable traffic and orders, nor has it forged deep partnerships with top vertical brands (such as Sam’s Club, Dingdong Maicai, Pupu Supermarket).

This makes Flash Express’s orders highly dependent on sporadic demand from external merchants and individual customers, creating significant order volatility and leaving it at a disadvantage in competition.

A more severe problem is the failure to build a broad, stable customer network.Unlike Dada, backed by JD.com, or SF Express’s intracity logistics anchored by SF Logistics, Flash Express lacks long-term enterprise clients. While it had collaborations with Xiaomi (invested by Lei Jun’s Shunwei Capital) and SKP, the low-frequency, scattered delivery demand for Xiaomi’s durable goods limits order scale.

A 2023 partnership with Meituan Waimai brought some order volume growth, but Meituan prioritized its own delivery capacity, relegating Flash Express to handling only tail-end orders at suppressed prices. This “parasitic” cooperation stripped Flash Express of bargaining power, compressing profit margins and relegating it to a “backup” delivery service provider.

Externally, Flash Express faces not only the disruption of the instant retail ecosystem but also worsening rider conditions.

The instant retail battle has expanded beyond “delivery efficiency” to the “full-chain closed loop.” Meituan’s diversified offerings in errands, food delivery, and flash purchases help it maintain dominance; JD.com, beyond its broad product range, positions its food delivery as “quality service,” diverting high-end clients like Apple product users to its own delivery system, reducing orders available to third-party platforms. Alibaba operates Hema and Ele.me as local lifestyle frontrunners.

In this context, the one-stop service model (seamless ordering and fulfillment) by internet giants deals a dimensionality reduction blow to Flash Express: users no longer need to select delivery services separately, and merchants avoid multi-platform management costs. The downside is that Flash Express, in pursuit of orders, risks entering a vicious price war.

Rider attrition exacerbates these issues. Unlike JD.com and Meituan, which provide social insurance for full-time riders, Flash Express’s approximately 3 million riders operate on a registration basis, with no public data on full-time versus part-time splits. Many riders register on multiple platforms, lowering loyalty.

Industry insiders revealed that by around October last year, several top-performing cake shops in Changsha stopped using Flash Express, causing rider income to plummet. Strict platform rules further drove rider turnover, especially among veteran riders who no longer want to work with Flash Express. Some riders joked, “Flash Express is a scam; the commission per order is high but the actual income is low—sometimes you might miss your own birthday.”

Policy changes also weigh heavily. In 2024, various regions introduced rider welfare policies mandating companies to provide social insurance for full-time riders, increasing operating costs for Flash Express. Meanwhile, consumer demands upgraded from “1-hour delivery” to “30-minute delivery.” Although Flash Express maintains an average nationwide delivery time of 27 minutes, diminishing marginal returns lower switching costs for users, gradually eroding its differentiation and relegating it to an “accessory” role in the new instant delivery ecosystem.

Founded in 2014, Flash Express once led intracity delivery with its “one-to-one urgent delivery” model.

By April 2016, it achieved profitability via a crowdsourced delivery pool and dynamic pricing system, becoming the first profitable vertical delivery platform. During this period, Flash Express focused on premium segments such as documents, flowers, and cakes, avoiding direct competition with Meituan and Ele.me. According to iResearch data, based on 2023 revenue, Flash Express commanded a 33.9% market share in China’s independent one-to-one dedicated delivery market, far exceeding competitors.

However, the very factor behind its success became its downfall: the model’s scale paradox. Maintaining “dedicated person-to-person” quality results in prohibitively high per-order delivery costs, impeding scalability.

With the fading of internet traffic dividends, customer acquisition costs in instant delivery rise yearly, and Flash Express’s reliance on high-frequency emergency demand faces diminishing marginal utility.

For small merchants, the priority shifted from “extreme timeliness” to “cost control plus reliable fulfillment.” Flash Express’s per-order delivery fee is higher than comparable services like Meituan and SF Express, weakening customer loyalty amid broadly pressured merchant profits.

Among general consumers, the trend towards “routine delivery” in instant retail replaced “emergency demand,” reducing tolerance for premium pricing on “dedicated delivery.” iMedia Consulting data indicates only 23% of consumers are willing to pay extra for “dedicated person delivery,” weakening Flash Express’s core service advantage against instant retail platforms’ cost-effective fulfillment.

The rapid rise of instant retail and evolving industry structure further magnify Flash Express’s predicament.

Currently, the instant delivery market segments into four groups:

Food delivery platforms represented by Meituan and Ele.me dominate large shares through “food delivery plus flash purchase” traffic ecosystems.

Traditional logistics companies like SF Express and JD Logistics operate parallel “courier plus instant delivery” tracks focusing on mid-to-high-end markets.

Ride-hailing platforms such as Didi and Amap enter the errands market leveraging four-wheel vehicle capacity.

Specialized delivery firms including Flash Express, Dada, and UU Paotui focus on niche segments, with some emphasizing “one-to-one” delivery, others building advantages through retail ecosystems or diversified services like purchasing on behalf and queueing.

Within this framework, Flash Express’s lagging position is clear.

Retail Business Finance identifies two seemingly viable but risky paths for Flash Express to navigate its survival crisis:

First, engaging in a price war to gain short-term market share. This “desperate” tactic may retain some price-sensitive customers temporarily but will accelerate loss of premium clientele and likely trigger a “low price—service degradation—brand devaluation” vicious cycle. For Flash Express, which posted a gross margin of 13.2% in Q1 2025, prolonged price competition equates to cash flow depletion.

Second, pursuing strategic dependence to become a fulfillment component within the instant retail ecosystem. Its 2022 partnership with Douyin for group purchase delivery reflects this approach, providing delivery services to Douyin’s local life merchants and attempting to tap into its traffic pool. However, competition from Dada and SF Express in Douyin’s logistics network prevents Flash Express from securing exclusivity.

Alternatively, deep integration with high-end retailers such as Costco and Sam’s Club is possible. These membership-based retailers lack proprietary instant delivery but impose strict cost control demands. Flash Express’s current per-order costs still leave room for optimization.

If it can reduce costs through technological upgrades (e.g., intelligent dispatch systems) and economies of scale, Flash Express may become an exclusive delivery service provider for premium retail, but this would mean abandoning its independent platform identity and becoming a vertical “fulfillment tool.”

Whether it chooses the self-destructive price war or the precarious role of an ecosystem-dependent provider, Flash Express faces painful strategic choices. Industry evolution pressures it to either achieve disruptive innovation through technology investment or secure an irreplaceable position via ecosystem collaboration. Otherwise, it risks being squeezed out entirely by dominant players.