Alibaba Group Holding has launched its new fast-delivery service, Taobao Instant Commerce, ahead of schedule in a move that intensifies competition with JD.com and Meituan. The service was officially introduced on Friday, even though its rollout was initially planned for May 6. It is now available in 50 major cities across China, covering a wide range of categories including food, groceries, electronics, and clothing. Orders are fulfilled using Alibaba’s food delivery arm, Ele.me, and aim to be completed within an hour, catering to the growing demand for speedy and affordable urban delivery services.
The acceleration of this service underscores Alibaba’s strategy to revitalize e-commerce growth and attract more users amid slowing consumer spending in China. Rapid delivery has become a critical component of daily life in Chinese cities, made possible by a vast network of delivery workers and sophisticated algorithms that optimize warehousing, routing, and order matching.
Taobao, China’s largest online marketplace, is leveraging this initiative to boost user engagement and drive sales. To attract customers, Taobao is offering significant consumer subsidies. For example, a cup of Mixue milk tea is being sold at just 6.8 yuan (approximately US$0.92). This aggressive pricing strategy has already shown results: sales of Mixue milk tea surged by 200% year-on-year on the first day of the instant commerce service, according to Beijing Youth Daily.
With consumer spending in a slump, competition among China’s top e-commerce platforms has become increasingly fierce. Companies are battling to win over users through both financial incentives and enhanced services. Alibaba’s early launch of the upgraded Taobao delivery offering adds further pressure on rivals JD.com and Meituan, who are already engaged in a competitive clash that has seen billions wiped from their market capitalizations.
The introduction of Taobao Instant Commerce is part of Alibaba’s broader strategy to strengthen its position in the market by enhancing its ecosystem of services. The company has emphasized the role of its offline retail networks, such as Ele.me and Freshippo, as key assets in its integrated e-commerce approach.
In the fourth quarter ending December 31, Alibaba’s Taobao and Tmall Group posted a 5% year-on-year increase in revenue. Meanwhile, its International Digital Commerce segment grew by 32%, and its Cloud Intelligence Group expanded by 13%, reflecting the company’s efforts to diversify and reinforce its market presence across various sectors.
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