Alibaba Intensifies Instant Delivery Fight With New Campaign

Chinese e-commerce juggernaut Alibaba Group Holding (NYSE:BABA) is intensifying its efforts in China’s fiercely competitive instant delivery market by launching a new 100-day Super Saturdays campaign under its Taobao Shangou brand.

This initiative, reported by SCMP on Tuesday, aims to significantly boost daily order volumes and draw users away from formidable rivals like Meituan (OTC:MPNGF) (OTC:MPNGY) and JD.com (NASDAQ:JD).

Through “Super Saturdays,” consumers can receive substantial subsidies, up to 188 Chinese yuan (approximately $26), on inexpensive items such as milk tea and breakfast.

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This strategic move comes amidst an escalating price war that has seen competitors employ equally aggressive tactics. Meituan, for instance, has been distributing complimentary milk tea through coupons, while JD.com has been offering nightly crayfish meals at a fixed, remarkably low price.

Adding to the intensity, Taobao itself rolled out a 50 billion yuan subsidy plan on July 2, which quickly prompted counter-announcements from its rivals.

Analysts say Alibaba’s deep pockets give it a firm footing to challenge rivals, though Meituan remains the market leader in scale and efficiency.

On July 11, Meituan’s daily instant retail order volume reached an impressive 150 million, nearly double Taobao Shangou’s 80 million.

According to Bank of China International, Meituan will likely hold its lead through 2025 and could sustain flat operating profits even if aggressive price-cutting continues through year-end.

Despite the heavy discounting and the “burn money” strategies employed by these companies, analysts remain optimistic about the long-term potential of the instant commerce sector in China.

The Chinese Academy of International Trade and Economic Cooperation, as cited by SCMP, projects that China’s instant commerce market is poised to exceed 2 trillion yuan ($279 billion) by 2030.

However, a recent report from JPMorgan Chase issued a cautionary note, suggesting that the share prices of Alibaba, Meituan, and JD.com could remain under pressure for the next three to six months.

This outlook is attributed to uncertainties surrounding profit margins and the sustainability of these extensive promotional campaigns.

Bridgewater Associates grew more optimistic about Chinese stocks after Beijing’s stimulus measures lifted its onshore China fund by 14% in the first half of the year, Bloomberg reported on Tuesday.

In a second-quarter investor letter, the firm’s China unit said it had “moderately increased” its equity exposure as of June 30, citing strong policy support and attractive valuations.

Bridgewater credited China’s swift April response to market declines, triggered by U.S. tariffs, with helping stabilize equities and bonds.

The firm added that low valuations still offer solid risk-reward potential and plans to raise exposure to risk assets amid ongoing government support.

Price Action: BABA shares are trading lower by 1.09% to $115.70 premarket at last check Wednesday.

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