Alibaba's US$7 billion subsidy deepens China's instant e-commerce war with JD.com, Meituan
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Consumers using Taobao's in-app Shangou service, the instant commerce business of Alibaba, will enjoy significant incentives, including cash vouchers, free purchase coupons, and subsidised prices on select items, according to the company.
Merchants will benefit as well, receiving support through store launch subsidies, product discounts, delivery subsidies, and reduced or waived commissions. Alibaba owns the South China Morning Post.
'Taobao Shangou leverages technological and business model innovations to build a highly efficient, integrated consumer platform … channeling substantial online traffic to offline businesses,' the company said, while emphasising its strategy as 'anti-involution, pro-consumption'.
'Involution' refers to increasingly intense internal competition that leads to diminishing returns, a phenomenon seen across various parts of Chinese society in recent years that has drawn concerns.
Ele.me food delivery riders in Beijing. Photo: Shutterstock Images
Launched late in April, Taobao Shangou – which means 'flash shopping' in Chinese – expanded nationwide in early May, offering rapid delivery for a variety of products, including food, electronics, clothing and flowers. Deliveries are fulfilled by Alibaba's food delivery subsidiary, Ele.me.
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