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Unlock the Editor\u2019s Digest for free<\/p>\n
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<\/iframe><\/div>\n<div id=\"article-body\">\n<p>Chinese ecommerce giants JD.com and Alibaba have ignited a battle for the country\u2019s fast-growing instant retail market, luring shoppers with huge discounts in a push to grab market share amid weak consumer spending. <\/p>\n<p>The two groups have launched rapid delivery offerings in recent months, supplying food and consumer staples within 30 minutes via their fleet of drivers. That has intensified competition in a sector that has largely been dominated by Beijing-based Meituan for the past few years.<\/p>\n<p>Alibaba is ploughing $7bn into promoting its Taobao Shangou service, while JD.com is investing $1.4bn over the next year to expand its food delivery business, as they fight it out to become China\u2019s leading \u201ceveryday app\u201d for transactions across goods and services. <\/p>\n<p>Chinese cities are plastered with advertisements promoting Alibaba and JD.com\u2019s new services, with the latter tempting shoppers with coffee and bubble tea for as little as $0.25. <\/p>\n<p>Analysts say the move is reminiscent of China\u2019s \u201ccoupon war\u201d 10 years ago, when tech groups Baidu and Alibaba and start-ups Meituan and Dianping launched aggressive subsidy campaigns in a fast-growing consumer market. <\/p>\n<p>\u201cWe\u2019re back to the 2016 price war,\u201d said a senior executive at one of China\u2019s leading delivery companies. \u201cFor years, these companies stayed in their lanes. Now, they\u2019re once again stepping on each other\u2019s turf with subsidy-fuelled strategies.\u201d<\/p>\n<p>China\u2019s fledgling instant shopping market is forecast to hit Rmb1.5tn ($209bn) by 2030, based on the total sales potential, up from about Rmb600mn in 2024, according to Goldman Sachs\u2019 analysts. They estimated that the three companies spent a combined $3bn on food delivery and instant retail in the second quarter.<\/p>\n<div class=\"n-content-layout\" data-component=\"flourish\" data-component-id=\"24177596\" data-component-type=\"flourish-in-article\">\n<figure class=\"n-content-picture n-content-layout__container\"><a href=\"#24177596\"><picture data-asset-type=\"flourish\" data-flourish-id=\"24177596\" data-flourish-type=\"visualisation\">\n<div id=\"24177596\" class=\"cp-message o-message o-message--inform o-message--notice\" data-o-component=\"o-message\">\n<div class=\"o-message__container\">\n<div class=\"o-message__content\">\n<p class=\"o-message__content-main\">Some content could not load. Check your internet connection or browser settings.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><\/picture><\/a><\/figure>\n<\/div>\n<p>But analysts warn the fight for China\u2019s instant delivery crown could be long and costly for the companies. Unlike the first wave of subsidy wars, the current battle is taking place against a backdrop of subdued consumer sentiment and a weak economy. <\/p>\n<p>\u201cThe delivery market is relatively mature, so there isn\u2019t the same level of upside as there was 10 years ago,\u201d said Robin Zhu, internet analyst at Bernstein.<\/p>\n<p>The delivery fight has wiped 25 per cent off Alibaba\u2019s share price since a mid-March high, as investors worry that the intensifying competition will be a long-term drag on profits. Meituan\u2019s share price has fallen 35 per cent and JD.com\u2019s 31 per cent in the same time period. <\/p>\n<p>Meituan, which has about 70 per cent of China\u2019s food delivery market, has vowed to defend its business \u201cat any cost\u201d. The group has increased consumer discounts and is investing in centralised kitchens, where merchants prepare food at premises it operates in an effort to improve food safety and cut delivery costs.<\/p>\n<p>Alibaba and JD.com have been emboldened by a recent government subsidy campaign for consumers to upgrade their electronics that excluded Meituan and PDD Holdings\u2019 platforms. <\/p>\n<p>JD.com\u2019s high-profile push into the <a href=\"https:\/\/www.ft.com\/content\/45e0796d-1a6e-4fd3-9fcd-3290cc570217\" data-trackable=\"link\">food delivery market<\/a> since February has seen it grab a significant share of that market. By June, it had hit an average of 25mn daily food delivery orders. <\/p>\n<p>The move has been led by its founder and chair Richard Liu, marking a return to public for the tech mogul after he steered the company from overseas since stepping down as chief executive in 2022. <\/p>\n<p>Alibaba\u2019s new Taobao Shangou service, created by integrating its food delivery business Ele.me with its retail platforms Taobao and Tmall, has also increased competition.<\/p>\n<p>\u201cThis restructuring has made Alibaba a more potent competitor,\u201d said one Meituan executive. <\/p>\n<p>Competition for riders has led Meituan to improve <a href=\"https:\/\/www.ft.com\/content\/adbb72bf-3538-4e5b-845e-fecdb1881658\" data-trackable=\"link\">social security benefits<\/a> for its couriers after JD.com rolled out driver incentives as part of its February launch. <\/p>\n<aside aria-labelledby=\"aside-label\" class=\"n-content-recommended--single-story n-content-recommended--inset\" data-component=\"recommended\">\n<p class=\"n-content-recommended__title o3-type-body-highlight\">Recommended<\/p>\n<div class=\"o-teaser o-teaser--article o-teaser--small o-teaser--stacked o-teaser--has-image js-teaser\" data-id=\"65e4bb30-b04c-4f0e-8686-effb96398999\">\n<div class=\"o-teaser__image-container js-teaser-image-container\"><a href=\"https:\/\/www.ft.com\/content\/65e4bb30-b04c-4f0e-8686-effb96398999\" data-trackable=\"image-link\" data-trackable-context-story-link=\"image-link\" tabindex=\"-1\" aria-hidden=\"true\"><\/p>\n<div class=\"o-teaser__image-placeholder\" style=\"aspect-ratio:2159\/1215\"><img decoding=\"async\" class=\"o-teaser__image\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fwww.ft.com%2F__origami%2Fservice%2Fimage%2Fv2%2Fimages%2Fraw%2Fhttps%253A%252F%252Fd1e00ek4ebabms.cloudfront.net%252Fproduction%252F8d8b15a3-4ffe-41d3-abfd-8d3a7f1401ad.jpg%3Fsource%3Dnext-article%26fit%3Dscale-down%26quality%3Dhighest%26width%3D700%26dpr%3D1?source=next&fit=scale-down&dpr=2&width=240\" alt=\"A Meituan food delivery drone in flight in Shenzhen, Guangdong, China in May 2025\"\/><\/div>\n<p><\/a><\/div>\n<\/div>\n<\/aside>\n<p>Last month, Meituan founder and chief executive Wang Xing publicly called for an end to the subsidy battles, urging regulators to intervene to stop the companies from distorting the market with their spending power. <\/p>\n<p>\u201cI believe it\u2019s the job of the regulator to stop the irrational and unhealthy subsidy competition, and our job is to win the fight as long as it\u2019s allowed to go on,\u201d he said. <\/p>\n<p>His comments came after antitrust officials met executives in May from several delivery groups to encourage \u201chealthy competition\u201d. \u201cRegulators are more focused on pricing battles in electric vehicles than consumer delivery,\u201d said one ecommerce executive.<\/p>\n<p>Chelsey Tam, senior equity analyst at Morningstar, said Meituan\u2019s subsidies should help it stem losses, estimating that its share of the food delivery market could fall to 60 per cent over the next decade.<\/p>\n<p>\u201cMeituan still has the best service quality and assortment, so it is important to keep subsidising to solidify consumer loyalty,\u201d said Tam. <\/p>\n<p>It is unclear how long the latest retail fight will last, experts say. \u201cThe big players all have deep pockets to sustain this fight,\u201d added Bernstein\u2019s Zhu. \u201cBut whoever emerges on top may find it a pyrrhic victory.\u201d<\/p>\n<p><em>Additional reporting by Haohsiang Ko in Hong Kong<\/em> <\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/3ee074a1-0210-4f09-ba6a-563ad0860aa3\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":7,"featured_media":34264,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-34263","post","type-post","status-publish","format-standard","has-post-thumbnail","category-tech","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34263","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34263"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34263\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/34264"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34263"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34263"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34263"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/iframe><\/div>\n<div id=\"article-body\">\n<p>Chinese ecommerce giants JD.com and Alibaba have ignited a battle for the country\u2019s fast-growing instant retail market, luring shoppers with huge discounts in a push to grab market share amid weak consumer spending. <\/p>\n<p>The two groups have launched rapid delivery offerings in recent months, supplying food and consumer staples within 30 minutes via their fleet of drivers. That has intensified competition in a sector that has largely been dominated by Beijing-based Meituan for the past few years.<\/p>\n<p>Alibaba is ploughing $7bn into promoting its Taobao Shangou service, while JD.com is investing $1.4bn over the next year to expand its food delivery business, as they fight it out to become China\u2019s leading \u201ceveryday app\u201d for transactions across goods and services. <\/p>\n<p>Chinese cities are plastered with advertisements promoting Alibaba and JD.com\u2019s new services, with the latter tempting shoppers with coffee and bubble tea for as little as $0.25. <\/p>\n<p>Analysts say the move is reminiscent of China\u2019s \u201ccoupon war\u201d 10 years ago, when tech groups Baidu and Alibaba and start-ups Meituan and Dianping launched aggressive subsidy campaigns in a fast-growing consumer market. <\/p>\n<p>\u201cWe\u2019re back to the 2016 price war,\u201d said a senior executive at one of China\u2019s leading delivery companies. \u201cFor years, these companies stayed in their lanes. Now, they\u2019re once again stepping on each other\u2019s turf with subsidy-fuelled strategies.\u201d<\/p>\n<p>China\u2019s fledgling instant shopping market is forecast to hit Rmb1.5tn ($209bn) by 2030, based on the total sales potential, up from about Rmb600mn in 2024, according to Goldman Sachs\u2019 analysts. They estimated that the three companies spent a combined $3bn on food delivery and instant retail in the second quarter.<\/p>\n<div class=\"n-content-layout\" data-component=\"flourish\" data-component-id=\"24177596\" data-component-type=\"flourish-in-article\">\n<figure class=\"n-content-picture n-content-layout__container\"><a href=\"#24177596\"><picture data-asset-type=\"flourish\" data-flourish-id=\"24177596\" data-flourish-type=\"visualisation\">\n<div id=\"24177596\" class=\"cp-message o-message o-message--inform o-message--notice\" data-o-component=\"o-message\">\n<div class=\"o-message__container\">\n<div class=\"o-message__content\">\n<p class=\"o-message__content-main\">Some content could not load. Check your internet connection or browser settings.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><\/picture><\/a><\/figure>\n<\/div>\n<p>But analysts warn the fight for China\u2019s instant delivery crown could be long and costly for the companies. Unlike the first wave of subsidy wars, the current battle is taking place against a backdrop of subdued consumer sentiment and a weak economy. <\/p>\n<p>\u201cThe delivery market is relatively mature, so there isn\u2019t the same level of upside as there was 10 years ago,\u201d said Robin Zhu, internet analyst at Bernstein.<\/p>\n<p>The delivery fight has wiped 25 per cent off Alibaba\u2019s share price since a mid-March high, as investors worry that the intensifying competition will be a long-term drag on profits. Meituan\u2019s share price has fallen 35 per cent and JD.com\u2019s 31 per cent in the same time period. <\/p>\n<p>Meituan, which has about 70 per cent of China\u2019s food delivery market, has vowed to defend its business \u201cat any cost\u201d. The group has increased consumer discounts and is investing in centralised kitchens, where merchants prepare food at premises it operates in an effort to improve food safety and cut delivery costs.<\/p>\n<p>Alibaba and JD.com have been emboldened by a recent government subsidy campaign for consumers to upgrade their electronics that excluded Meituan and PDD Holdings\u2019 platforms. <\/p>\n<p>JD.com\u2019s high-profile push into the <a href=\"https:\/\/www.ft.com\/content\/45e0796d-1a6e-4fd3-9fcd-3290cc570217\" data-trackable=\"link\">food delivery market<\/a> since February has seen it grab a significant share of that market. By June, it had hit an average of 25mn daily food delivery orders. <\/p>\n<p>The move has been led by its founder and chair Richard Liu, marking a return to public for the tech mogul after he steered the company from overseas since stepping down as chief executive in 2022. <\/p>\n<p>Alibaba\u2019s new Taobao Shangou service, created by integrating its food delivery business Ele.me with its retail platforms Taobao and Tmall, has also increased competition.<\/p>\n<p>\u201cThis restructuring has made Alibaba a more potent competitor,\u201d said one Meituan executive. <\/p>\n<p>Competition for riders has led Meituan to improve <a href=\"https:\/\/www.ft.com\/content\/adbb72bf-3538-4e5b-845e-fecdb1881658\" data-trackable=\"link\">social security benefits<\/a> for its couriers after JD.com rolled out driver incentives as part of its February launch. <\/p>\n<aside aria-labelledby=\"aside-label\" class=\"n-content-recommended--single-story n-content-recommended--inset\" data-component=\"recommended\">\n<p class=\"n-content-recommended__title o3-type-body-highlight\">Recommended<\/p>\n<div class=\"o-teaser o-teaser--article o-teaser--small o-teaser--stacked o-teaser--has-image js-teaser\" data-id=\"65e4bb30-b04c-4f0e-8686-effb96398999\">\n<div class=\"o-teaser__image-container js-teaser-image-container\"><a href=\"https:\/\/www.ft.com\/content\/65e4bb30-b04c-4f0e-8686-effb96398999\" data-trackable=\"image-link\" data-trackable-context-story-link=\"image-link\" tabindex=\"-1\" aria-hidden=\"true\"><\/p>\n<div class=\"o-teaser__image-placeholder\" style=\"aspect-ratio:2159\/1215\"><img decoding=\"async\" class=\"o-teaser__image\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fwww.ft.com%2F__origami%2Fservice%2Fimage%2Fv2%2Fimages%2Fraw%2Fhttps%253A%252F%252Fd1e00ek4ebabms.cloudfront.net%252Fproduction%252F8d8b15a3-4ffe-41d3-abfd-8d3a7f1401ad.jpg%3Fsource%3Dnext-article%26fit%3Dscale-down%26quality%3Dhighest%26width%3D700%26dpr%3D1?source=next&fit=scale-down&dpr=2&width=240\" alt=\"A Meituan food delivery drone in flight in Shenzhen, Guangdong, China in May 2025\"\/><\/div>\n<p><\/a><\/div>\n<\/div>\n<\/aside>\n<p>Last month, Meituan founder and chief executive Wang Xing publicly called for an end to the subsidy battles, urging regulators to intervene to stop the companies from distorting the market with their spending power. <\/p>\n<p>\u201cI believe it\u2019s the job of the regulator to stop the irrational and unhealthy subsidy competition, and our job is to win the fight as long as it\u2019s allowed to go on,\u201d he said. <\/p>\n<p>His comments came after antitrust officials met executives in May from several delivery groups to encourage \u201chealthy competition\u201d. \u201cRegulators are more focused on pricing battles in electric vehicles than consumer delivery,\u201d said one ecommerce executive.<\/p>\n<p>Chelsey Tam, senior equity analyst at Morningstar, said Meituan\u2019s subsidies should help it stem losses, estimating that its share of the food delivery market could fall to 60 per cent over the next decade.<\/p>\n<p>\u201cMeituan still has the best service quality and assortment, so it is important to keep subsidising to solidify consumer loyalty,\u201d said Tam. <\/p>\n<p>It is unclear how long the latest retail fight will last, experts say. \u201cThe big players all have deep pockets to sustain this fight,\u201d added Bernstein\u2019s Zhu. \u201cBut whoever emerges on top may find it a pyrrhic victory.\u201d<\/p>\n<p><em>Additional reporting by Haohsiang Ko in Hong Kong<\/em> <\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/3ee074a1-0210-4f09-ba6a-563ad0860aa3\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":7,"featured_media":34264,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-34263","post","type-post","status-publish","format-standard","has-post-thumbnail","category-tech","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34263","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34263"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/34263\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/34264"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34263"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34263"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34263"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}