Di Yi Cai Jing Zi Xun·2025-09-12 12:17Core Insights - The competition in the local life service sector has intensified, with Alibaba entering the market through Gaode and launching the "Smoke Fire Good Store Support Plan" with over 1 billion yuan in subsidies to encourage in-store consumption [1] - Douyin has also announced a similar initiative called the "Smoke Fire Small Store Support Plan," targeting merchants with an average consumption of under 100 yuan, providing traffic incentives and resources [1] - Analysts predict that the focus of competition will shift from food delivery to non-food instant retail and in-store services in the fourth quarter of 2025 [1] Company Strategies - Alibaba's investment in in-store services is driven by the higher profitability of this business and the need for an independent platform to support local life services, as Taobao cannot cover all scenarios [3] - Meituan has historically maintained its leading position through cash flow control and a strong ground team, but faces challenges from new entrants like Douyin and Alibaba [4] - Douyin's local life services achieved over 300 billion yuan in transaction volume in 2023, but faces challenges in user retention and service fulfillment [4][5] Market Dynamics - The local life service market is evolving into a duopoly between Meituan and Douyin, with Alibaba's re-entry pushing the industry into a new competitive phase [4] - The overall e-commerce market is experiencing slower growth, with traditional platforms like Alibaba and JD.com facing competition from content-driven e-commerce platforms like Douyin and Kuaishou [7][8] - The competition is not just about acquiring new users but also about cultivating user habits and increasing the time spent on respective apps, which can lead to higher-margin e-commerce transactions [1][8] Financial Performance - Meituan's stock has dropped 49.1% from its March high of 189.6 HKD to 96.55 HKD, while Alibaba's stock has risen 98.6% from a low of 76.073 HKD to 151.1 HKD, marking a four-year high [2] - Meituan reported revenue of 918.4 billion yuan and an adjusted net profit of 14.9 billion yuan in Q2 2025, while Douyin's e-commerce GMV is projected to reach 4.2 trillion yuan in 2025 [7]