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China’s E-Commerce Giants Burn Billions in Price War Over “Instant Retail”

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China’s biggest e-commerce firms — Alibaba, JD.com, and Meituan — are locked in a bruising price war to dominate the fast-growing “instant retail” one-hour delivery market, a battle that is slashing profits, fueling deflationary pressures, and drawing regulatory scrutiny.

To capture market share, the platforms are showering consumers with deep discounts and coupons, triggering a cash burn estimated at $4 billion in Q2 alone, according to Nomura. S&P Global projects the three companies could collectively spend 160 billion yuan ($22B) over the next 12–18 months, with little chance of margin recovery for at least two years.

  • JD.com’s CEO Sandy Xu called the rivalry “unsustainable excessive competition.”

  • Meituan’s CEO Wang Xing described a “new phase of competition.”

  • PDD Holdings’ co-CEO Zhao Jiazhen said the intensity had “further escalated.”

The fight began earlier this year when JD.com launched a service to challenge Meituan’s core food-delivery business, prompting Alibaba (via its Ele.me app) to also ramp up spending. Analysts liken the standoff to a “game of chicken,” where whichever firm blinks first risks wasting billions.

Meituan faces the biggest hit, since food delivery is its primary revenue driver. JD.com nearly saw its food-delivery losses erase Q2 profit, while Alibaba is cushioned by its more diversified model.

Despite the bloodletting, executives argue the long-term prize is worth it. Alibaba’s Jiang Fan projects the instant retail segment could add 1 trillion yuan ($137B) in incremental annualized GMV within three years. Early signs show cross-platform benefits: JD.com’s active users grew 40% YoY in Q2, and Alibaba’s Taobao app saw MAUs jump 25% in August, helped by converting food-delivery users.

Still, Beijing is watching closely. Regulators have warned against a “race to the bottom”, and in July the companies pledged to curb destructive price wars under government “anti-involution” measures. Analysts expect some rationalization in competition by 2025, but until then, short-term pain looks inevitable as firms chase long-term dominance.

Allegro CEO Denies Dispute with InPost Amid Arbitration Claim

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Polish e-commerce giant Allegro rejected suggestions of a business dispute with its partners on Friday, despite ongoing tensions with its key delivery provider InPost (INPST.AS).

“We do not believe that we are involved in any business or other dispute with any entity,” said Allegro CEO Marcin Kusmierz, who took charge in June. His comments came after InPost announced in July that it had filed an arbitration claim, accusing Allegro of breaching a long-term delivery agreement by redirecting customers to its own parcel lockers.

InPost, which derives roughly 30% of its Polish revenue from Allegro, has seen its shares tumble more than one-third this year, though they gained 9% on Friday after a sharp 13% drop earlier in the week on weaker parcel volumes. Allegro shares were up around 2%.

InPost CEO Rafal Brzoska has defended the arbitration move as necessary to protect shareholder interests. Allegro, however, emphasized that it respects existing agreements while continuing to diversify its logistics network by adding new partners and rolling out its own lockers to cut delivery costs.

JPMorgan analysts noted that the interdependence of the two companies makes a negotiated settlement likely, though it may reduce InPost’s margins. The bank estimated that Poland will account for 48% of InPost’s revenue in 2025, but that figure could fall to 35% by 2030 as the company accelerates its international expansion.

JD.com Struggles to Gain Ground in China’s Instant-Delivery Market

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Chinese e-commerce giant JD.com (9618.HK) is ramping up efforts to expand its instant-delivery business through JD Takeaway, launched in February, aiming to diversify revenue beyond its core retail operations. Despite significant investments and improvements in user engagement—quarterly active customer growth and shopping frequency rose over 40%—the company faces a steep challenge breaking into a market dominated by established players.

Daily active users of JD’s delivery service have declined steadily since mid-June, falling more than 13% week-on-week by July 27, according to M Science data, signaling potential market share loss. Analyst Vinci Zhang noted that Meituan (3690.HK) and Alibaba’s (9988.HK) Ele.me service possess strong expertise in food delivery, making JD’s expansion particularly difficult.

JD’s investments in food delivery have also compressed profitability, with the adjusted operating margin dropping to 0.3% in the June quarter from 4% a year ago. By comparison, Meituan recently recorded an all-time high of 120 million daily orders across food and retail, controlling nearly 70% of the delivery market, while Alibaba’s Taobao instant commerce combined with Ele.me hit 80 million daily orders, with 200 million daily active users early in July.

The market is seeing fierce competition, with the three companies collectively pledging nearly 200 billion yuan ($27.87 billion) in subsidies, fueling a price war in instant retail that has drawn regulatory attention. JD.com CEO Sandy Xu emphasized the company’s focus on platform improvements to attract more users, merchants, and delivery riders, even as competitors prepare to report their quarterly results.