Alibaba Group has introduced a new fast delivery feature on its shopping platform, in its latest move to seize market share in the delivery market from competitors such as JD.com and Meituan. Previously, JD.com had initiated a costly battle in an attempt to grab market share from the food delivery giant Meituan.
According to screenshots seen by Dow Jones, on Wednesday, the Alibaba shopping platform Taobao displayed an “Instant Commerce” tag on its homepage, covering dozens of cities in China. The screenshot shows that customers opting for this new service can order various products including food, clothing, and shoes, and receive their goods in less than an hour.
Alibaba confirmed on Wednesday that it has added this feature, making it the latest Chinese company to enhance its ultra-fast delivery service.
This move comes at a time when Alibaba is facing intense competition in the Chinese delivery market.
JD.com, a newcomer in the food delivery sector, has been actively challenging Alibaba’s Ele.me and Meituan, including plans to recruit 100,000 full-time delivery drivers to expand their new business.
Bloomberg reported on April 25 that the market battle between JD.com and Meituan could be a prolonged competition that will harm the profitability of both companies. Analysts have lowered the target prices of these two companies, and defensive positions in the options markets have strengthened. The stock prices of both companies listed in Hong Kong have dropped by around 30% from their highs in March, with a total market value loss of about $70 billion.
The report quoted a fund manager from Ying Fung Bank Asset Management (Hong Kong) as saying that the short-term outlook for both sides has worsened, and the duration of this battle remains uncertain, with the intense competition in the Chinese food delivery market likely to damage profitability.
JPMorgan estimates that JD.com holds approximately 5% of the Chinese food delivery market, while Meituan had about 75% previously, and Alibaba Group Holding Limited’s Ele.me holds about 25%.
(Some content in this article is based on reports from The Wall Street Journal)