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South China Morning Post
23-07-2025
- Business
- South China Morning Post
Chinese companies must turn involution into sustainable evolution
Beijing is trying to curb cutthroat price wars that have broken out in multiple sectors. Caused by overcapacity and insufficient demand, many companies have been locked into an unsustainable spiral of price-cutting that not only forgoes profits but imperils their very business survival. Ultimately, job losses will be a lose-lose for all sides concerned. Advertisement Whether in food delivery, e-commerce or advanced manufacturing for batteries, solar panels and electric vehicles, excessive competition has created a vicious cycle that Beijing fears is contributing to price deflation. Such deflation is sticky and difficult to reverse once established. Factory gate prices fell for the 33rd month in June, hindering official efforts to boost domestic consumption. The term neijuan, or involution, has gained currency to describe excessive competition . There is emerging consensus among officials and businesses on the need to turn neijuan into sustainable evolution to boost consumption. Online food delivery platforms Meituan and are among the latest to be hauled before regulators and urged to engage in 'rational' competition. All three have been locked in a price war since February. Meituan's core local commerce business director, Wang Puzhong, even admitted that the price war made no sense but that his company was forced to join to avoid looking like 'the loser'. Meanwhile, Industry and Information Technology Minister Li Lecheng warned solar panel makers that excessive competition and oversupply were hurting their industry. It is hardly the only one. Key sectors such as electrical machinery, steel, cement, ceramics and glass have all experienced price declines. Interestingly, the price of polysilicon, a key component of photovoltaic solar panels, rose significantly not long after Li met industry representatives. Advertisement
Yahoo
21-07-2025
- Business
- Yahoo
Chinese regulator urges major food deliverers to compete fairly
China's State Administration for Market Regulation (SAMR) has called a meeting with prominent online food delivery companies, including from Alibaba Group, Meituan and to discuss ongoing price competition in the industry. The regulator has stressed the need for these companies to adopt more 'rational' competitive practices, as reported by the South China Morning Post. The SAMR's meeting aimed to regulate promotional activities, promote fair competition and create a balanced environment that benefits consumers, merchants, delivery personnel and platform operators. The regulator reminded the companies of their obligations under e-commerce, anti-unfair competition and food safety laws. In a separate session, the SAMR addressed food safety issues linked to live-streaming e-commerce, revealing that some food products sold during live-streamed events contained high levels of food additives or pesticide residues. Representatives from various live-streaming platforms and influencer agencies participated in this discussion, although their identities were not disclosed. This intervention by the SAMR follows a period of intense rivalry among the three food delivery platforms, which have been engaged in aggressive discounting to increase their market presence, according to the news agency. Recent promotions included significant reductions in delivery fees for items such as tea and coffee, and the expansion of their offerings to include groceries and other products. The competition intensified in mid-July 2025, with all three companies offering substantial subsidies. which initiated the competitive drive early in the year, revealed plans to invest more than 10bn yuan ($1.4bn) to enhance restaurant quality on its delivery platform. The company had announced its entry to the Chinese food delivery sector in February 2025. Alibaba has introduced a 50bn yuan subsidy initiative to encourage consumer spending on its Taobao Shangou service, along with promotional events. These competitive tactics have reportedly resulted in a marked increase in transaction volumes, with daily orders rising from 100 million at the beginning of the year to more than 250 million recently. However, the aggressive nature of this competition has led to criticism from industry figures, including Meituan's core local commerce business director, who described the current state of competition as 'irrational.' "Chinese regulator urges major food deliverers to compete fairly" was originally created and published by Verdict Food Service, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-07-2025
- Business
- Yahoo
Jefferies maintains Buy on Alibaba shares, cites strong AI-driven cloud growth
-- Jefferies reiterated its Buy rating on Alibaba (NYSE:BABA) shares on Wednesday, highlighting accelerating cloud revenue growth and record momentum in instant commerce operations as key catalysts. Looking ahead to Alibaba's June-quarter results, Jefferies wrote: 'Accelerating Cloud revenue growth is expected due to solid AI demand,' estimating Cloud Intelligent Group revenue growth of 23% year over year, ahead of both its prior 20% forecast and market consensus. The firm noted this momentum is being driven by rising enterprise demand for artificial intelligence applications. Jefferies also pointed to record highs in daily order volume for Alibaba's instant commerce platforms, writing: 'Taobao Instant Commerce and Eleme announced that their combined daily order volume exceeded 80 million on 5 July,' including more than 13 million non-meal orders. The firm noted that the milestone follows a previous record of 60 million orders on June 23, underscoring what Jefferies called 'solid momentum… across segments.' However, the firm also flagged pressure on margins due to spending on growth, estimating overall EBITA to decline 15% year over year to about RMB38 billion, with a margin of 15%, below consensus expectations of 18%. For the Taobao Tmall Group segment, which now integrates local services Eleme and OTA Figgy, Jefferies expects a 20% decline in EBITA, citing investment in instant commerce. Still, the firm remains upbeat on the medium-term trajectory. 'We believe the market has formed expectations on investment in instant commerce,' Jefferies wrote, adding that CMR is set to outpace GMV growth, thanks to contributions from QZT and service fees. Jefferies expects Alibaba to update investors on AI cloud growth, user engagement, and competitive positioning during its upcoming earnings call. Related articles Jefferies maintains Buy on Alibaba shares, cites strong AI-driven cloud growth JP Morgan upgrades Bloom Energy on restored fuel cell tax credit Apple should acquire Perplexity AI to boost AI strategy, says Wedbush Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
South China Morning Post
07-07-2025
- Business
- South China Morning Post
Taobao's daily on-demand orders soar as China's instant e-commerce war heats up
The Taobao figures were released a day after rival Meituan reported record orders for its instant delivery service Alibaba Group Holding is seeing a rapid acceleration in the volume of on-demand delivery transactions, the latest sign of growing rivalry with Meituan and in China's instant e-commerce market. Combined daily orders on Taobao Instant Commerce – the company's latest push into on-demand delivery – and food delivery app reached 80 million, Taobao said on its official WeChat account on Monday. Daily active users on Taobao Instant Commerce surpassed 200 million. Alibaba owns the South China Morning Post. The figures were released a day after Meituan, Alibaba's bigger rival in the on-demand delivery sector, announced it had achieved record orders for its instant delivery service. On Saturday, Meituan said daily transaction volume covering food and retail goods had reached an all-time high of 120 million, briefly crashing its servers in certain areas. The Alibaba figures reflect the rapid progress achieved by Taobao Instant Commerce, which was launched in late April as the company's answer to Meituan's Instashopping and food delivery service. The service reached 10 million daily orders within its first week and 40 million within the first month. A group of Meituan food delivery couriers wait for new orders on March 22, 2025 in Chongqing, China. Transaction volumes have accelerated over the past few weeks as e-commerce players started to offer more discounts and subsidies to boost consumption during the peak summer season. It took the platform nearly a month to grow daily orders from 40 million to 60 million, but just 12 days to gain another 20 million. Alibaba, which is seeking new growth beyond its traditional e-commerce business, has been betting big on on-demand delivery. It just announced a consumer and merchant subsidy programme totalling 50 billion yuan (US$7 billion) that will run over the next 12 months. Newsletter Saturday China Future Tech By submitting, you consent to receiving marketing emails from SCMP. If you don't want these, tick here {{message}} Thanks for signing up for our newsletter! Please check your email to confirm your subscription. Follow us on Facebook to get our latest news. Last month, it announced the merger of and its online travel agency Fliggy into its core e-commerce operations, describing the move as a 'strategic upgrade from an e-commerce platform to a comprehensive consumer platform'. 'Synergies between food delivery, instant commerce and traditional commerce are [the] next focus,' Jefferies analysts said in a research note on Sunday about Alibaba's latest order figures. Alibaba reiterated that its strategy was to avoid 'involution', referring to increasingly intense competition that leads to diminishing returns, a phenomenon seen across various parts of Chinese society in recent years, raising concerns from the central government. The rapid growth of Taobao Instant Commerce has elevated the market size of China's instant delivery sector, boosting the total daily order volume across different platforms from around 100 million in May to 200 million, Alibaba said.
South China Morning Post
07-07-2025
- Business
- South China Morning Post
Taobao's daily on-demand orders soar as China's instant e-commerce war heats up
Alibaba Group Holding is seeing a rapid acceleration in the volume of on-demand delivery transactions, the latest sign of growing rivalry with Meituan and in China's instant e-commerce market. Combined daily orders on Taobao Instant Commerce – the company's latest push into on-demand delivery – and food delivery app reached 80 million, Taobao said on its official WeChat account on Monday. Daily active users on Taobao Instant Commerce surpassed 200 million. Alibaba owns the South China Morning Post. The figures were released a day after Meituan, Alibaba's bigger rival in the on-demand delivery sector, announced it had achieved record orders for its instant delivery service. On Saturday, Meituan said daily transaction volume covering food and retail goods had reached an all-time high of 120 million, briefly crashing its servers in certain areas. The Alibaba figures reflect the rapid progress achieved by Taobao Instant Commerce, which was launched in late April as the company's answer to Meituan's Instashopping and food delivery service. The service reached 10 million daily orders within its first week and 40 million within the first month. A group of Meituan food delivery couriers wait for new orders on March 22, 2025 in Chongqing, China. Transaction volumes have accelerated over the past few weeks as e-commerce players started to offer more discounts and subsidies to boost consumption during the peak summer season. It took the platform nearly a month to grow daily orders from 40 million to 60 million, but just 12 days to gain another 20 million.
