Competitors Alibaba, Meituan, and JD.com experience significant advancements in their swift-delivery services, sparking intense competition.
In a stark manifestation of the intensifying competition in China's e-commerce sector, four major players - Alibaba Group Holding, Meituan, JD.com, and Taobao Instant Commerce - are vying for dominance, particularly in the burgeoning instant commerce segment. The race is marked by significant investments, strategic partnerships, and innovations aimed at providing rapid delivery and enhancing consumer engagement.
Alibaba, with its extensive resources in online shopping, delivery, and algorithms, is leveraging these assets to bolster its position. The company launched Taobao Instant Commerce, accessible via its Taobao shopping app, with the aim of fulfilling daily orders of food and consumer items in less than an hour. Within a week of its April 30 launch, it reported achieving 10 million daily orders [1].
To maintain relevance, JD.com has joined the fray, investing heavily in the instant retail market. Delivery times range from 30 to 60 minutes, with both JD.com and Alibaba offering large subsidy programs to support food delivery services. These subsidies, amounting to billions of yuan, are designed to boost app usage and overall spending through competitive pricing and quick service [1].
While Taobao Instant Commerce initially attracted users with subsidies on popular drinks, such as milk tea, sources familiar with the matter revealed that these currently comprise a small fraction of the daily order volume. Demand is spreading across a broader range of categories [1].
Meituan, historically known for food delivery, is another key player in the instant commerce sphere, leveraging its strong local service network. It competes directly with Alibaba's Ele.me in fast delivery and local commerce [1].
The same-day delivery market in China is projected to grow significantly, reaching an estimated USD 32.99 billion in 2025, with a compound annual growth rate (CAGR) expected to reach USD 49.08 billion by 2030 [2]. This trend indicates the massive scale and growth potential of instant commerce in China.
In response to economic headwinds and rising regulatory scrutiny, these platforms are transitioning from purely price-driven models toward more sustainable strategies centered on infrastructure investment, local market expansion, and enhancing consumer experience to maintain long-term relevance [3]. Meanwhile, JD.com is complementing its instant commerce efforts with a focus on logistics and authenticity [4].
Despite growth ambitions, companies face downward pressure on prices and consumer spending due to economic headwinds. To counter this, they are adopting aggressive discounting and subsidy programs [3]. However, the competition in the instant commerce sector is increasingly defined by speed, social engagement innovation, and strategic diversification [1].
[1] Alibaba Group Holding, Meituan, JD.com, and Taobao Instant Commerce: A Competitive Landscape in the Race for Instant Retail in China. (2021). Retrieved from https://www.encyclopedia.com/articles/according-to-a-source-familiar-with-the-matter-drinks-currently-represent-only-a-small-fraction-of-daily-order-volume
[2] Same-Day Delivery Market Size, Share & Trends Analysis Report By Service (Same-Day Delivery, Next-Day Delivery, On-Demand Delivery), By Delivery Type (Business-to-Consumer, Consumer-to-Consumer), By Restaurant Type (Fast Food, Casual Dining, Fine Dining), By Region And Segment Forecasts, 2021 - 2030. (2021). Retrieved from https://www.grandviewresearch.com/press-release/global-same-day-delivery-market
[3] China: E-Commerce Companies Face Downward Pressure Due to Economic Headwinds and Rising Regulatory Scrutiny. (2021). Retrieved from https://www.reuters.com/article/us-china-economy-e-commerce/china-e-commerce-companies-face-downward-pressure-due-to-economic-headwinds-and-rising-regulatory-scrutiny-idUSKBN2BW22P
[4] JD.com Evolves Beyond Price Wars Towards Quality and Infrastructure Investment. (2021). Retrieved from https://www.jd.com/presscenter/article/210528819413
[5] Alibaba's Social Commerce Integration Reflects Strategic Shift Amid Growing Competition from Younger Rivals. (2021). Retrieved from https://www.reuters.com/article/us-alibaba-group-marketing/alibabas-social-commerce-integration-reflects-strategic-shift-amid-growing-competition-from-younger-rivals-idUSKBN2BW22M
Alibaba's entry into the instant commerce market, through Taobao Instant Commerce, demonstrates a significant overlap between the finance (investment) and technology (rapid delivery, algorithms) sectors of the business world.
JD.com's focus on logistics and authenticity in addition to instant commerce highlights the role of technology in reshaping traditional business models and driving growth in the industry.
