Why Alibaba’s Amap is Unmapping Meituan’s Turf丨CBN Perspective

Core Insights - Alibaba and Meituan are engaged in a competitive landscape, with Alibaba launching new features on its Amap platform to challenge Meituan's market share in local services [1][5] - The local services market in China is projected to reach CNY35.3 trillion by 2025, indicating significant growth potential [6] Alibaba's Strategy - Alibaba introduced an AI-powered feature called "Street Stars" on Amap, allowing users to rank local businesses based on their behavior and Alipay's credit score [2][3] - The "Street Stars" initiative covers over 1.6 million offline service providers across more than 300 cities, including 870,000 restaurants and 230,000 hotels [4] - The strategy aims to leverage Amap's 700 million monthly active users to drive traffic towards local businesses, effectively turning navigation into a shopping opportunity [7] - By integrating Alipay's credit system, Alibaba enhances the reliability of reviews, filtering out fake comments and prioritizing trustworthy ratings [8] - A CNY1 billion subsidy is being offered to encourage spending on services like dining and car rides, creating a synergy with Ele.me's delivery services [9][10] Meituan's Response - Meituan has relaunched its "Premium Delivery" service, promising 30-minute delivery from top-rated restaurants, while also utilizing AI to filter reviews [11][12] - Despite a revenue increase of 12% to CNY91.8 billion, Meituan's net profit fell by 89% to CNY1.5 billion, indicating challenges in profitability [13] - Meituan's strength lies in its network effect, but it faces challenges in maintaining trust due to issues with fake reviews in in-store services [14] Industry Dynamics - The competition is shifting from traditional marketing to AI-driven solutions that prioritize user behavior over subjective reviews, indicating a transformation in local service decision-making [16] - The future of local services will likely hinge on the capabilities of AI assistants to understand consumer needs and deliver superior experiences [17]