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In the rigid competitive market in China, the last price war is played in the growing “instant commerce” sector, where companies launch large subsidies and other incentives to make consumers spend.
The “instant commerce” sector is supported by the massive networks of scooters, which quickly transport all from food and drinks to fast fashion and gadgets.
Space mainly takes up three major players, including created e -commerce seals Jd.com and Alibaba, as well as the Meituan delivery platform, which has largely focused on food delivery.
The competition between these companies has intensified this year, and all three expanded their delivery networks and promise billions in subsidies for sellers and consumers.
The result is insanely fast and cheap sentences. Checked through the JD.com delivery platform on Friday, CNBC found a cheap coffee as 10.9 yuan, or $ 1.50, including shipping fees. Meituan offered 13 yuan a set of buns and breakfast 26.8 Yuan McDonald.
However, despite the benefit for Chinese consumers, the price war also weighted investors and the profit forecast. Meituan and Jd.comFor example, this year, according to LSEG, their shares decreased by about 22% and 10%.
How did we get here?
Chinese e -commerce players invariably competed during the supply of great labor and economy in the country. Building a strong logistics network, JD has set the standard on the market during the day or delivery of packages the next day, pressing on competitors such as Alibaba.
However the last battle of “Instant Commerce” in China began after Jd.comTransfer to the Takeout dining market in February, entering the space where Meituan, the market leader, and the alibaba ele.me delivery platform, prevails.
Delivery rider, which wears the Logistics JD form, tuns up his helmet while sitting on the electric scooter next to the Meituan shipping field, with several other delivery workers near May 26, 2025, Chongqing.
Chen Sin | Getty Images | Gets the image
Then, in April Jd.com With the new 24/7 “flash -buying“The platform that included categories such as products, alcohol and electronics and promised deliveries within 30 minutes.
The tension grew when the companies participated in direct competition. Eventually both companies accused each other of using Anti-Channel Practice To block the riders to accept orders on the rival platforms. It was about the time when JD started hiring more day drivers and founder Richard Liu was photographed Delivery of food orders In Beijing in a viral advertising corpse.
This month also saw Jd.com Circle the first round of subsidies worth 10 billion yuan, which went to the food discounts program.
Subsidies and mass discounts are the usual phenomenon in the competitive technology sector of China and Reason for concern For Beijing.
Chinese Main Market Regulator provoke JD.com, Meituan and Alibaba’s Ele.me in May, calling them to follow the law and fight honestly. Retail groups too expressed problems about Jd.com’s The subsidies program and the effects of the price set. However, the deviation has little effect on the slowdown in the price war.
On Tuesday, Jd.com Another 10 billion investments have been announced as part of its “two -point plan” aimed at providing targeted platform supporters.
It came after Taobao —Imogne trading Alibaba announced On Saturday, a subsidy program worth 50 billion yuan (about $ 7 billion), which will be distributed over the next year. It adds that it reached 200 million orders a day afterwards.
The same day discounts and coupons offered on Meituan According to local media.
As a result, the company said that it received a record 120 million orders this Saturday – so much that in certain fields, a temporary gap of its servers suffered.
While all companies have boasted an increase in instant trading users in recent months, it remains unclear how much pricing will affect their profits.
Meituan report What its profits for the first quarter of 2025 amounted to 10.2 billion yuan, which is 63% a year. However, he warned that in the next quarter, he would probably affect the increased competition in instant retail.
In May, Jd.com It is reported that its operating income increased by 31.4% to 11.7 billion yuan in the first quarter of 2025 a year. However, economists interviewed by LSEG expect the profit in the second quarter to come to the annual and quarterly basis.
According to Nomura’s analysis, a Thursday published on Thursday, published on Thursday, published on Thursday. Analysts estimate that JD scored about 10% of the instant delivery market with 20 million orders a day.
Going forward, “we believe that JD may have to reconsider their ambitions,” analysts said. They noted that in the light of Alibaba’s cost increase, JD may have to burn all the profits obtained by its main retail business-for several quarters when it wants to compete with two market executives.
