The e-commerce battle between Meituan, JD.com, and Alibaba is intensifying, with the current focus shifting to local lifestyle services.
On Wednesday, Alibaba’s map provider, Gaode Maps, announced the launch of the “Gaode Street Ranking” campaign, along with the initiation of the “Fireworks Good Store Support Plan.” By offering subsidies totaling over 1 billion yuan (approx. 140 million USD), the initiative aims to provide AI-driven rankings for local businesses such as restaurants, hotels, and tourist attractions, encouraging customers to visit and make purchases. This move is escalating the competition pressure on JD.com and Meituan in their quest for Chinese consumers.
In a statement, the company revealed plans to introduce new incentive measures to subsidize consumer spending on transportation and dining.
Bloomberg reported that Alibaba’s actions may raise concerns among investors about the three-way competition for Chinese consumers. The e-commerce (takeout) battle began when JD.com invested heavily to challenge Meituan in the food delivery sector. Today, these three companies are expanding their battleground to include rapid business and location-based services. The damage to profit margins is exceeding expectations, with JD.com’s second-quarter profits halved and Meituan warning of significant losses. The three companies saw $27 billion worth of stocks sold off in August.
The fierce e-commerce competition has put Beijing on edge. The Chinese market regulatory agency met with major food delivery platforms on Tuesday, urging them to “eliminate unfair competition and avoid malicious subsidies.”
Alibaba acquired Gaode Maps in 2014, pitting it against similar services offered by Baidu and Tencent Holdings Limited. Alibaba’s products have already introduced location-based lifestyle features, such as ride-hailing and hotel reservations, along with destination rankings.
Alibaba itself has faced setbacks in the so-called local lifestyle services space. According to research by Dongbei Securities, online sales in this sector are expected to reach 15 trillion yuan this year. Despite merging with Yahoo China’s portal website, the group-buying service Koubei was unable to outperform its competitor Meituan in user reviews during the early stages of mobile internet development.