Investment Rating - The report maintains a "Buy" rating on Alibaba, Meituan, and PDD, while highlighting JD as a potential multiple repair/re-rating story [14][15][18]. Core Insights - The competition intensity among eCommerce players, particularly Alibaba, JD, and Meituan, in food delivery and instant shopping has escalated, with an estimated aggregate investment of Rmb25 billion (approximately US$3 billion) in the June quarter alone [9]. - The report estimates a total addressable market (TAM) of Rmb2.4 trillion for food delivery and Rmb1.5 trillion for instant shopping by 2030, driven by increased platform subsidies and user acquisitions [4][40]. - The ultimate goal for these companies is to become the "everyday app" for transactions, facilitating cross-selling across various goods and services [12][56]. Summary by Sections Market Overview - The food delivery competitive landscape is rapidly evolving, with Meituan achieving 90 million daily orders and Alibaba's Taobao Instant Commerce reaching 60 million peak daily orders [34]. - The report anticipates a re-acceleration of on-demand eCommerce penetration in China, projecting a TAM of Rmb1.5 trillion by 2030 [35][42]. Financial Projections - The report outlines three scenarios for food delivery and instant shopping, with a base case projecting a 5.5:3.5:1 market share between Meituan, Alibaba, and JD [10][27]. - Estimated losses for Alibaba and JD in food delivery are projected at Rmb-41 billion and Rmb-26 billion, respectively, over the next 12 months [9]. Company-Specific Insights - JD is expected to disproportionately benefit if it stabilizes its food delivery scale, while PDD is positioned to have a more resilient profit setup due to its lack of direct involvement in the food delivery competition [10][18]. - Meituan's strategic pivot towards centralized kitchens aims to enhance food safety and reduce delivery costs, which could improve long-term unit economics [11][54]. User Engagement and Traffic - The report notes a significant increase in daily active users (DAU) for both JD and Taobao, with a combined increase of 50 million DAU to approximately 410 million [12][56]. - The consolidation of offerings into a single app is seen as a strategy to monetize increased engagement from high-frequency food delivery [57].

Core Insights - Alibaba's instant commerce platform has achieved over 40 million daily orders within a month of its launch, indicating strong consumer demand and rapid adoption [1] - The platform integrates merchants from Alibaba's food delivery service, Ele.me, into Taobao, facilitating deliveries within 60 minutes [1] - The instant retail market in China is projected to grow significantly, with estimates suggesting it could serve 1 billion consumers in the future [3] Company Advantages - Alibaba has established delivery capabilities over the years and has invested in the Freshippo grocery chain, providing a competitive edge in the instant retail space [2] - The company boasts a mature merchant base and a robust logistics system, which are crucial for supporting instant commerce [3] Market Competition - The instant retail market in China is highly competitive, with major players like JD.com and Meituan also investing heavily in this sector [3][4] - The competition is characterized by companies encroaching on each other's territories, as growth opportunities are limited [4] Consumer Behavior - Research indicates that convenience services, particularly grocery and restaurant delivery, are popular among consumers, even those facing financial pressures [5][6] - A significant portion of consumers living paycheck to paycheck still utilize grocery delivery services, highlighting the demand for convenience [6]

Last month, Chinese tech conglomerate Alibaba debuted a fast delivery service it dubbed “instant commerce.”On the company’s earnings call Thursday (May 15), analysts wanted to know: Why now, especially given recent intensification in the food delivery space?Fan Jiang, CEO of the company’s eCommerce segment, argued the company has some notable advantages, having built up its delivery capabilities for years, while also investing in and developing the Freshippo grocery chain.“One thing to note about this insta ...