Alibaba’s Taobao Shangou briefly overtook Meituan in daily delivery orders last week, after a free drinks promotion, according to a report by the technology media outlet LatePost.

Taobao Shangou, Alibaba’s on-demand commerce service, reached over 100 million orders on August 7, 2025, about 20 million fewer than Meituan.

It later surpassed its rival after Meituan ended its own promotion.

Morgan Stanley said that heavy subsidies are intensifying competition between the two firms, with the market shifting toward a near-duopoly.

The bank estimated that by 2030, Alibaba and Meituan could each control about half of China’s instant commerce market, although Meituan may continue to lead food delivery specifically.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Subsidy wars can temporarily disrupt even dominant market leaders

Alibaba’s brief victory over Meituan shows how aggressive promotional campaigns can quickly shift consumer behavior, even against established market leaders with deep operational advantages.

Despite Meituan holding over 60% of China’s food delivery market since 2018, Alibaba’s free drinks campaign pushed Taobao Shangou orders above 100 million, temporarily overtaking Meituan when the incumbent stopped its promotions 1 2.

This example demonstrates how promotional spending can rapidly reshape market dynamics in China’s ultra-competitive delivery sector.

The effectiveness of these campaigns highlights a fundamental challenge for market leaders: maintaining dominance requires continuous investment in customer acquisition, even when holding substantial market share advantages.

However, the temporary nature of Alibaba’s gains, lasting only while promotions were active, suggests that subsidies alone cannot overcome the operational efficiencies and network effects that established players like Meituan have built over years.

2️⃣ Chinese regulators are actively managing platform competition to prevent market consolidation

The State Administration for Market Regulation’s intervention reflects China’s approach to preventing excessive concentration in digital platforms while still allowing competitive dynamics.

Regulators summoned all three companies in August to urge “rational” competition, and separately extended antitrust scrutiny of Meituan without an end date in February 2025, signaling sustained oversight of the sector 2.

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