Alibaba ‘Instant’ Commerce Platform Crosses 40 Million Daily Orders

Alibaba’s Taobao Instant Commerce offering surpasses 40 million daily orders less than a month after launch, as e-commerce battle turns ugly

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An Alibaba Group building. Image credit: Alibaba Group
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Chinese e-commerce giant Alibaba said its Taobao Instant Commerce platform, which launched less than a month ago with deliveries in less than an hour, has surpassed 40 million daily orders, in a fresh sign of the growth of the country’s “instant retail” trend.

Alibaba launched the service late last month bringing together its Ele.me food-delivery offerings along with other items that it said could be time-sensitive for consumers, such as electronics, clothing and flowers.

Ele.me is handling the orders for the new service, which launched initially in 50 Chinese cities and expanded to all users of the Taobao e-commerce platform in early May.

A Meituan delivery driver in China. Image credit: Unsplash
A Meituan delivery driver in China. Image credit: Unsplash

‘Instant’ commerce

The move brought together Alibaba’s delivery network, which has been competing with local market leader Meituan in food delivery, with its established online marketplaces.

E-commerce giant JD.com has also been augmenting its delivery capabilities to take on Meituan and boost sales.

China’s e-commerce players have been constantly seeking to expand their appeal amidst tough competition, with one of the more recent trends being livestream e-commerce, which is a major revenue generator in Asia and recently began gaining popularity in the US and Europe.

Meituan, which leads China’s food-delivery market, on Monday reported a 46 percent increase in first-quarter profit over the same period last year, but cautioned that the second quarter would see a hit amidst rising competition in instant retail.

Chief executive Wang Xing told analysts on a call that it was “impossible” to project guidance for the rest of the year due to intense competition, and warned of “volatility” in the short term.

Meituan had been expanding beyond food delivery into rapid delivery of other items, and JD.com responded in February by aggressively targeting Meituan’s core food-delivery business with JD Takeaway.

Bitter feud

Both JD Takeaway and Alibaba’s Ele.me, which ranks second after Meituan, have pledged 10 billion yuan (£1bn) in consumer subsidies to boost sales.

China’s State Administration for Market Regulation recently stepped in with new guidelines about how Meituan, JD.com and Alibaba should charge fees to merchants.

Earlier this month five government agencies held meetings with the three companies and urged them to compete fairly after JD and Meituan in April publicly accused one another of monopolistic practices, highlighting the bitterness of competition in the sector.