--- title: "Instant Retail \"Three Kingdoms\": Subsidies Are the Surface, Ecosystem Is the Future" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/31660609.md" description: "Three giants are competing in a trillion-dollar market, with overlapping strategic paths and differentiated ambitions rooted in their own DNA. Original New Entropy New Consumer Group Author: Siyuan Editor: Fushen, Jiuli After more than three months of "fierce battle," the "war" in instant retail has not extinguished but instead intensified. Alibaba and Meituan's successive strong pushes have directly elevated the food delivery subsidy war to new heights. Alibaba's internal code-named "Huaihai Campaign" 100-day flash sale growth plan saw the Taobao Tmall market team deploy budgets and setups comparable to Double 11 on the first day..." datetime: "2025-07-10T09:18:28.000Z" locales: - [en](https://longbridge.com/en/topics/31660609.md) - [zh-CN](https://longbridge.com/zh-CN/topics/31660609.md) - [zh-HK](https://longbridge.com/zh-HK/topics/31660609.md) author: "[新熵](https://longbridge.com/en/profiles/10215178.md)" --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/topics/31660609.md) | [繁體中文](https://longbridge.com/zh-HK/topics/31660609.md) # Instant Retail "Three Kingdoms": Subsidies Are the Surface, Ecosystem Is the Future Three giants compete in the trillion-dollar market, with overlapping strategic paths and differentiated ambitions rooted in their own genes. Original New Entropy New Consumption Group Author 丨 Si Yuan Editor 丨 Fu Shen, Jiu Li After more than three months of "fierce battle," the "flames of war" in instant retail have not extinguished but have become more intense. Alibaba and Meituan's successive strong investments have directly elevated the takeaway subsidy war to a new height. Alibaba's internal code-named "Huaihai Campaign" hundred-day flash sale growth plan, on the first order day, Taobao Tmall's market team put out a budget and formation comparable to Double 11, turning the major app splash screens orange, ultimately achieving over 80 million orders. Meituan quickly followed up with increased investment, lifting restrictions to fully subsidize, doing everything possible to follow Taobao's flash sale subsidy war, issuing various coupons, and even preparing many free order coupons for consumers to pick up themselves. According to Meituan's official "battle report," before 11 p.m. that night, all takeaway orders on the platform exceeded 120 million. If you add JD Takeaway, which fired the first shot in this round of takeaway war, it is conservatively estimated that the daily order volume of the entire Chinese takeaway market has soared to 220 million. From the surface to the inside, looking closely at the takeaway war, we can actually see that the platforms' "real intention" is in instant retail. However, in this major transformation of online retail, Meituan, Taobao, and JD each have their own goals, but the paths to achieve them are surprisingly consistent. ### The logic of the three "mixed battles" is different The billion-dollar war initiated by instant retail is just beginning, and each platform will invest more resources in the future. Alibaba announced an investment of 50 billion yuan in the next 12 months, with order rushes every Saturday; Meituan subsidized 30 billion last year and is expected to increase by 10 billion to 20 billion this year; JD launched the "Double Hundred Plan," investing over 10 billion to support merchants. In fact, the real money investment of each company is not to compete in the takeaway market. First is Alibaba, the largest in terms of internet business size and scale among the three, whose core goal is to expand instant retail through takeout and transform the Taobao ecosystem. In recent years, Alibaba's biggest concern has been obvious: the growth rate of its main e-commerce business is very limited (annual growth of less than 10%), while instant retail growth exceeds 20%. Although it started to increase investment in AI business at the beginning of the year, given the current maturity of the AI industry, it is too early to talk about capital return rates. With the basic business facing the risk of deceleration and innovative business still in its infancy, Alibaba urgently needs a growth campaign with tangible results to maintain capital market confidence and internal organizational cohesion. Instant retail happens to be the most reasonable anchor point. Alibaba hopes to convert users from "visiting Taobao a few times a month" to "ordering takeout multiple times a week" through the high-frequency demand of the takeout business, such as daily meals, and drive non-catering category consumption. This has indeed brought results. According to Taobao Flash Sale data, on July 5, orders for categories such as grain and oil, and maternal and child products increased by over 100% year-on-year, with non-catering orders reaching 13 million, a six-fold increase from last year. ▲Image/Taobao Flash Sale page screenshot In addition, Meituan is reportedly building a "retail version of Taobao" (flash sales covering multiple categories), but the richness of goods (especially high-margin categories such as fresh food and maternal and child products) is not yet complete. Alibaba's move at this time is intended to weaken its expansion foundation, forcing Meituan and JD to continue investing in subsidies, consuming competitors' cash flow. From Alibaba's perspective, the core reason for heavily investing in instant retail is to grow while preventing competitors from "sneak attacks." Meituan's layout in instant retail, to some extent, is the natural growth of its takeaway business. As early as 2018, Meituan established the Flash Sale Business Unit, attempting to solve consumers' temporary procurement needs. In 2022, Meituan began large-scale promotion of "Lightning Warehouses," and by 2024, 30,000 have been built. With a moat of 7 million riders and a mature delivery system, Meituan has shouted the slogan "30-minute delivery of everything," and the daily order volume of flash sales has exceeded 12 million. It is worth mentioning that Meituan's Xiaoxiang Supermarket is not only a representative of its self-operated retail but also a "pioneer" in its foray into traditional e-commerce retail categories from catering. For Meituan, instant retail is not only a business extension but also a key battle to consolidate the moat of local life services. The high penetration rate of catering takeout forces Meituan to find new growth points, and instant retail happens to undertake high-frequency consumption scenarios beyond catering: fresh food, alcohol, medicine, flowers, and even grain, oil, rice, noodles, frozen food, household cleaning, maternal and child, personal care, and other temporary rigid needs. Currently, Meituan's flash sale business accounts for 15% of the overall GMV, covering multiple categories such as supermarkets, convenience stores, and digital home appliances. In other words, Meituan not only wants to do takeout but also wants to do more. Although JD entered instant retail late, its competitiveness cannot be underestimated due to its own warehousing, logistics system, and other infrastructure advantages. Moreover, JD's logic for doing takeout is different from Meituan and Alibaba, mainly to serve the fresh supply chain. Liu Qiangdong also clearly stated in his speech: "The front end can never make money by selling meals, I just need to make money through the supply chain." In fact, JD Seconds Delivery was officially launched in 2023, integrating the Hourly Delivery and JD Home businesses at that time, reducing the delivery time from one hour to half an hour, with the fastest reaching 9 minutes, which is also the confidence for JD to do takeout now. From the current perspective, JD's purpose in doing instant retail is very clear, based on its self-operated genes, to strengthen the competitiveness of high-frequency categories such as catering, fresh food, and fast-moving consumer goods, and to open up the full chain fulfillment system of local life, including travel, to enhance the platform user experience. This reveals Liu Qiangdong's high emphasis and confidence in "supply chain hard power." Coincidentally, although Alibaba, Meituan, and JD have different purposes and logic for "strongly attacking" instant retail, from the current perspective, their tactics are surprisingly similar. ### One road leads to three endpoints From the current actions of the three companies, the means of exertion are very simple and crude, relying on a large number of subsidies, and all starting at the billion-level. The effect of doing so is also very direct, consumers enjoy benefits, merchants explode orders, delivery riders earn a lot, and platform GMV rises, forming a seemingly win-win situation. However, the core value of instant retail lies in "high frequency," with takeout, fresh food, daily necessities, etc., being categories that users consume almost weekly or even daily, belonging to the core source of traffic. High-frequency consumption scenarios (such as milk tea, fast food) can cultivate user habits and dependencies, ultimately sedimenting traffic into platform entry value. In addition, subsidies directly impact users' price sensitivity points. For example, JD Takeaway's 1.68 yuan milk tea coffee, Meituan, and Ele.me's large no-threshold coupons, this "ultra-low price" strategy triggers viral spread on social media, forming a "national wool gathering" effect, quickly increasing platform exposure. ▲Image/JD Takeaway Of course, subsidies are not only for consumers but also extend to merchants and the delivery end, forming a "three-party binding" ecological closed loop: the platform attracts quality merchants to settle in through commission exemption, traffic support, explosive product operation, etc. This subsidy strategy helps merchants increase order volume in the short term, and in the long term, enhances merchant dependence through data empowerment (such as intelligent product selection, inventory management), forming exclusive cooperation. As for the delivery capacity side represented by riders, subsidies are also the core means of competing for delivery resources. JD plays the clear card of paying five insurances and one fund for full-time riders, while Meituan and Taobao Flash Sale reduce rider empty run rates through high order density and dynamic pricing mechanisms, consolidating delivery network advantages. This "subsidy + guarantee" combination punch not only improves service quality but also forms rider migration barriers. In fact, when platforms cannot form significant differences in categories, timeliness, and services, subsidies have to become the most direct competitive weapon. And this "burning money for market" logic is essentially about quickly establishing user scale barriers through capital advantages, compressing competitors' living space. Similarly, high investment also means this is a long-term working capital confrontation. Moreover, there is a consensus in the industry: subsidies will cultivate users' "nomadic" consumption habits, and when the platform stops subsidies, user retention may plummet. So in the short term, price wars are the simplest, most direct, and fastest way to effectively increase platform traffic, but in the long term, homogeneous low-price subsidies may lead to merchant profit compression, food safety risks rising, and instead bring negative feedback to the platform. Burning money subsidies are essentially the "entry ticket" for internet platforms in the instant retail track, with the core goal of exchanging short-term investment for long-term user, merchant, and rider resources. Despite the pressure of profitability and user retention challenges, in the context of an unsettled market structure and sufficient capital support, it is still the most effective competitive means. However, in the future, when the industry shifts from "price wars" to "efficiency wars" and "quality wars," there is also an opportunity for a win-win situation. ### The future may be a win-win situation As early as around 2016, the founders of the three companies frequently expressed their views on the instant retail market. Alibaba's Jack Ma proposed the concept of "new retail" at the 2016 Yunqi Conference, believing that in the next ten or twenty years, there will be no e-commerce, only "new retail." It was also in this year that the first Hema Fresh in China opened in Jinqiao, Shanghai, focusing on instant delivery. A year later, JD's Liu Qiangdong proposed the "unbounded retail" model, "In the next 10 to 20 years, the combination of consumption and technology will bring changes to retail infrastructure, triggering the fourth retail revolution, bringing us into the era of 'unbounded retail.'" ▲Image/Finance Magazine In the same year, Meituan launched the "Food+Platform" architecture, entering the "borderless" expansion stage, continuously venturing into online car-hailing, shared bicycles, global homestays, same-city delivery, offline new retail, and other businesses beyond takeout and group buying. Meituan's "big retail" concept is centered on instant retail, building a "everything to home" ecosystem covering daily consumption needs by integrating multi-scenario and all-category retail services. In fact, the strategic goals set by the three platforms nearly a decade ago have already destined the current "red-eyed" situation in the instant retail market. In "New Entropy's" view, the three are not fighting to the death, and different strategic goals can also achieve a win-win situation. For example, as consumers shift from "emergency needs" to "all-scenario, all-category" needs, platforms can conduct vertical differentiation in categories, with Meituan guarding the high-frequency demand cake of catering, Alibaba exploring high-margin categories such as fresh food and maternal and child products; JD leveraging its advantages to focus on high-ticket items such as 3C digital for instant delivery. Of course, in the short term, both Alibaba and JD need a long-awaited victory, while Meituan needs to take the opportunity to consolidate its moat. However, this battle has no shortcuts or quick victory magic, and the future competition in instant retail will surpass simple "subsidy wars," becoming a comprehensive contest of supply chain efficiency, data capabilities, and user mindset. It tests the platform's patience, determination, and ability to do hard and tiring work. To achieve a win-win situation rather than a zero-sum game in instant retail, it is necessary to achieve value increment through differentiated positioning, ecological collaboration, and technological innovation. If Meituan, Alibaba, and JD can find a balance between high frequency and low frequency, quality and low price, online and offline, while ensuring the interests of merchants, riders, and consumers, it is entirely possible to form a "each beauty its own, beauty and beauty together" pattern. As pointed out in the Ministry of Commerce report, the future of instant retail lies in "balancing the interests of platforms, merchants, and consumers," which requires giants to shift from "subsidy wars" to "value co-creation," opening up a sustainable growth path in the trillion-dollar market. References: Wang Zhiyuan, "Meituan and Alibaba Start Betting on the Future" Jinduan, "What's Different About This Round of 'Instant Retail War'?" Ling Beast, "Fierce Battle in Instant Retail: Why Are Giants Flocking In?" Sina Finance, "Why Are Alibaba and Meituan Suddenly Increasing Investment in Instant Retail?" 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