Alibaba Unites Business Units to Counter Meituan's Dominance in China's Instant Commerce Market

Alibaba Group and its fintech affiliate Ant Group have launched a unified strategy to compete with Meituan in China's instant commerce market. Alibaba is improving welfare for millions of riders, equipping them with new uniforms, and providing enhanced benefits, education, and healthcare support. The company has abandoned its plan to split into independent entities and consolidated its domestic and international e-commerce operations. Despite regulatory intervention, analysts expect rivalry to persist under tighter controls. Alibaba's stock is up 42% year-to-date, while JD.com is down 10%.

Alibaba Group and its fintech affiliate, Ant Group, have joined forces to create a unified strategy aimed at challenging Meituan in China's instant commerce market. This move, announced recently, involves coordinating efforts across multiple business units to improve the conditions of millions of delivery riders and enhance consumer welfare. The initiative is part of a broader strategic reset under the leadership of CEO Jiang Fan, who has consolidated Alibaba's domestic and international e-commerce operations into a single unit.

One of the key aspects of this unified strategy is the improved welfare for delivery riders. Alibaba has pledged to equip its riders with new orange uniforms designed like racing suits and provide enhanced benefits, education, and healthcare support. This public welfare campaign marks the first time since 2020 that all of Alibaba's key brands are aligned under a single banner [1][2][3].

The initiative also includes a new membership program that integrates marketplaces, food delivery, and travel bookings, further binding consumers to Alibaba's ecosystem. In August, Ele.me briefly overtook Meituan's daily delivery volumes after offering customers free drinks with orders, reflecting Alibaba's aggressive promotional strategies [1].

Despite regulatory intervention in August, which led to a truce on price wars in the $80 billion food delivery market, analysts expect the rivalry to persist under tighter controls. Alibaba's Ele.me has promised to safeguard merchant margins, while Meituan has vowed to stop forcing subsidy programs, and JD.com has committed to avoiding "malicious" discounts [1].

Alibaba's stock has been on an upward trajectory, climbing 42% year-to-date, while JD.com's stock has seen a 10% decline. The stock performance reflects the company's AI models gaining traction and its e-commerce business turnaround, backed by aggressive promotions [1]. Despite regulatory challenges and the $433.5 million settlement over Ant Group's regulatory issues, Alibaba's stock has shown resilience and growth [4].

The unified strategy signals a significant shift in Alibaba's approach to the competitive instant commerce market. By consolidating its operations and focusing on rider welfare, Alibaba aims to strengthen its position against Meituan and other competitors.

References:
[1] https://www.benzinga.com/markets/tech/25/08/47235915/alibaba-unites-its-empire-to-fight-back-against-meituan
[2] https://www.scmp.com/tech/big-tech/article/3322369/alibaba-ant-combine-forces-take-meituan-chinas-instant-commerce-market?module=latest&pgtype=homepage
[3] https://www.scmp.com/tech/big-tech/article/3322369/alibaba-ant-combine-forces-take-meituan-chinas-instant-commerce-market
[4] https://www.tradingview.com/news/11thestate:23bd80648094b:0-alibaba-reached-433-5m-settlement-over-ant-group-fallout-how-to-claim-your-payout/