Alibaba gives Taobao on-demand delivery an upgrade in Meituan, JD.com competition

Alibaba Group Holding has promised faster delivery service and more subsidies to consumers in China as it moves to take on JD.com and Meituan amid intensifying competition in the country’s e-commerce market.

Alibaba has launched an upgraded service called Taobao Instant Commerce, which covers not only food, but also other goods that meet the “time-sensitive needs of consumers”, including electronics, clothing and flowers, the company’s e-commerce unit said on Wednesday. Alibaba owns the South China Morning Post.

Ele.me, Alibaba’s food delivery arm, is handling orders from the new service, which has rolled out in 50 Chinese cities and will expand to all Taobao users in the country by May 6, according to a person familiar with the matter.

The move marks a significant step in Alibaba’s efforts to find synergy between its online marketplaces and delivery network, which has been competing directly with Meituan in food delivery. It also ushers China’s e-commerce competition into a new era of “instant retailing”. JD.com is boosting its delivery capabilities to take on Meituan and facilitate sales on its platforms.

Alibaba shares in Hong Kong rose 2.2 per cent to HK$117.5 on Wednesday, while Meituan fell 1.4 per cent to HK$130.3 and JD.com declined 0.8 per cent to HK$127.9.

Closer integration of retailing and delivery at Alibaba is the latest effort from China’s largest e-commerce player to find new ways to grow its user base on its dominant shopping platforms through additional services, including faster deliveries.