---
title: "Why did Alibaba and Meituan suddenly increase their focus on instant retail?"
type: "Topics"
locale: "zh-CN"
url: "https://longbridge.com/zh-CN/topics/31594296.md"
description: "Without any preheating or probing, the subsidy shells between giants fell densely, instantly igniting the already smoke-filled battlefield of instant retail to a white-hot level. On July 2, Taobao Flash Sale suddenly announced a new 50 billion yuan subsidy plan and positioned July 5—the first weekend of the second half of 2025—as &#34;Rush Day,&#34; distributing a large number of 15 yuan off 11 yuan coupons. Meituan did not stand by and watch. On July 5, it launched a large number of &#34;0 yuan purchase self-pickup coupons&#34; for milk tea and snacks, along with many large discount coupons..."
datetime: "2025-07-09T00:08:36.000Z"
locales:
  - [en](https://longbridge.com/en/topics/31594296.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/31594296.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/31594296.md)
author: "[锦缎研究院](https://longbridge.com/zh-CN/profiles/2576456.md)"
---

> 支持的语言: [English](https://longbridge.com/en/topics/31594296.md) | [繁體中文](https://longbridge.com/zh-HK/topics/31594296.md)


# Why did Alibaba and Meituan suddenly increase their focus on instant retail?

Without any prelude or probing, the subsidy war between giants erupted instantly, igniting the already fiercely competitive instant retail market to a white-hot intensity.

On July 2, Taobao Flash Sale suddenly announced a new 50 billion yuan subsidy plan, designating July 5—the first weekend of the second half of 2025—as "Order Surge Day," distributing a large number of 15-yuan-off-11-yuan coupons. Meituan did not stand idly by, launching a wave of "0-yuan pickup vouchers" for milk tea and snacks on July 5, along with substantial discount coupons.

As the scale and scope of subsidies from both sides continued to expand, Taobao Flash Sale ultimately achieved a peak of 80 million orders in a single day (compared to Ele.me's peak daily orders of 25-30 million during the same period last year). Meanwhile, Meituan shattered its previous record of 90 million daily orders with a staggering 120 million orders per day.

Why did Alibaba and Meituan choose this moment to aggressively escalate the instant retail battle? What opportunities do they see, and what are they fighting for?

**(1) From Alibaba's perspective: The core reason boils down to three words—"growth needed."**

Undoubtedly, Alibaba is the largest among the three major players in instant retail in terms of internet business scale. However, the flip side reveals its biggest challenge in recent years:

Relying solely on take rate improvements, the growth of its core e-commerce business is limited. Content e-commerce failed to compete with Douyin, the lower-tier market was lost to Pinduoduo, and the once-promising cloud business showed sluggish profit growth after turning profitable. While Alibaba International appears to be growing steadily (double-digit growth), the rise of Shein and Temu has overshadowed AliExpress.

At the beginning of this year, the only growth lever Alibaba could grasp was AI sector, leading to a significant increase in capital expenditure in this direction. However, it soon realized that given the current maturity of the AI industry, discussing return on investment (ROI) was premature.

**With its core business at risk of slowing down and innovation still in its infancy, Alibaba faces a "valuation dilemma" from a capital market perspective. This is also the root cause of its stock price slump after a brief rally in Q1.**

**Given this predicament, Alibaba urgently needs a growth campaign with tangible ROI to maintain market confidence and internal cohesion—instant retail happens to be the perfect anchor:**

First: JD.com and Meituan have already heated up the instant retail market. Whether to protect Ele.me's position as the industry's second player or to safeguard its e-commerce core from disruption, Alibaba must step in to assert its stance, ensuring its reputation as China's internet TOP2 remains unchallenged.

Second: The defensive battles fought by Ele.me and Taobao Flash Sale in March and April made Alibaba realize that the instant retail market is far from saturated. Increased capital expenditure can translate into significant order volume and traffic (orders doubled in a year). Compared to the stagnant content e-commerce and uncertain AI, instant retail offers the best ROI.

Third: If it can't compete with Pinduoduo in the lower-tier market, encroaching on JD.com's share might be a viable growth strategy. Unlike Meituan, Taobao Flash Sale's main competitor is likely JD.com—while it may not surpass Meituan, Ele.me holds a clear advantage over JD.com in instant delivery. Draining JD.com's e-commerce business through capital expenditure could yield tangible growth.

Thus, Alibaba's sudden blitzkrieg and increased bets become clear.

**(2) From Meituan's perspective: Escalating subsidies is both a tactical necessity to protect consumer "mindshare" and a strategic move with highly certain ROI.**

As the long-standing industry leader, Meituan understands the value and potential of instant delivery. Its original strategy was to expand horizontally, leveraging its infrastructure and know-how—venturing overseas and extending from food delivery to 3C electronics and other traditional e-commerce categories.

After establishing its "fast" brand in instant retail, Meituan focused on solving the "variety and affordability" challenge. Without strong competitors, it could afford to grow steadily. After all, if everything can be delivered in 30 minutes, why would consumers wait for traditional e-commerce?

However, the sudden shifts in the instant retail market this year have prompted Meituan to reconsider:

First: The growth potential (or ceiling) of instant delivery is higher than Meituan anticipated. Last year, the online food delivery market grew by 7.2%, with a five-year CAGR of 25%, showing signs of slowing.

Chart: China's Online Food Delivery Market Size and Growth Rate, Source: iMedia Research

But this year, order volume tells a different story: JD.com created 20-30 million orders out of thin air; Alibaba doubled its volume; Meituan, which reported 6.167 billion instant delivery orders last year (averaging 68 million daily), hit a peak of 120 million daily orders—a high-base growth from its previous 98 million peak. This suggests the food delivery market could grow by 30-50% this year.

**This likely exceeds Meituan's most optimistic internal projections.**

**Sacrificing short-term profits to capture this heated market with subsidies might be the highest-ROI choice.**

Second: While Meituan lacks Alibaba's capital strength, it compensates with superior organizational efficiency. Its business lines are built around instant delivery, allowing for rapid consolidation and resource reallocation. For example, scaling back new initiatives reflects this strategy. Securing its leadership in instant delivery ensures future expansion without internal friction.

Third: Instant retail is Meituan's lifeline; losing market share is not an option. With its business lines streamlined, Meituan's decision to join the subsidy war makes sense.

While many view Meituan as passively defending in this war (it remained relatively restrained in the first half), we believe **Meituan is likely to emerge as the biggest winner.**

As always, the know-how of instant retail and service markets is far more complex than outsiders realize—route optimization, service efficiency, subsidy leverage, and offline integration remain Meituan's unique advantages.

In this context, Meituan's escalation is a guaranteed ROI move, far from a losing bet.

**(3) Finally, a word of caution for JD.com: Maintaining visibility while turning this into a war of attrition might be its best strategy.**

Frankly, JD.com is in a tricky spot due to two inherent weaknesses:

First: Compared to Meituan or even Ele.me, JD.com lacks the foundational infrastructure for instant delivery—merchants, riders, and systems must be built from scratch, incurring higher costs and risks.

Second: Unlike Alibaba, JD.com operates a capital-intensive model with relatively weaker liquidity and financial firepower. Whether it can sustain a subsidy war remains questionable.

That said, JD.com cannot afford to back down. As the initiator of this battle, it has invested heavily to heat up the market. Letting rivals reap the rewards as the payoff window approaches is unacceptable.

Moreover, withdrawing would not only render its prior investments sunk costs but also risk its e-commerce business becoming the "sunk cost" that fuels Alibaba and Meituan's growth—a scenario JD.com cannot tolerate.

Thus, days later, JD.com launched the "Double Hundred Plan" on July 8, pledging over 10 billion yuan to help brands hit million-unit sales. Details are scarce, so its subsidy intensity remains to be seen.

The core question for JD.com is how much to invest, how to synergize with existing operations, how to avoid inefficiencies, and—most critically—how to prevent excessive cash burn that could leave its e-commerce business vulnerable to rivals. These are tough challenges.

These concerns likely explain JD.com's delayed response.

For JD.com, this is not a "war of abundance." Its best strategy may be to play the long game—staying visible while leveraging its strengths in a war of attrition. Both Alibaba and Meituan have vulnerabilities:

For Meituan, the battle is on its home turf, and prolonged erosion of consumer mindshare is its nightmare. For Alibaba, if heavy investments fail to deliver growth, internal tensions could spiral.

In conclusion, regardless of who wins this instant retail war, its significance transcends a mere subsidy race. Every move by Meituan, Alibaba, and JD.com is not just a capital gamble but a test of strategic vision, operational efficiency, and ecosystem synergy. This battle will reshape China's internet commerce landscape.

Someday, this instant retail war will be condensed into a few lines in internet history. Yet, like the e-commerce, social media, and group-buying wars before it, these words may encapsulate the dramatic fate of an internet giant.

**This article is based on public information and is for informational purposes only. It does not constitute investment advice.**

$MEITUAN(03690.HK) $BABA-WR(89988.HK)

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