This article is a translated excerpt of a blog post written by Latepost on April 30th,2025 , a China-based media coverage focused on tech companies and business trends. You can find the original post in Chinese here. Please note that the opinions expressed here are of the author, not Momentum Works.

According to our understanding, on the last day of April, Alibaba upgraded its Taotian Group’s quick commerce business from “Taobao Xiaoshida”  (a delivery service ensures delivery within one hour) to “Taobao Instashopping”.  The service was first launched in over 50 cities and is expected to roll out nationwide by May 6th.

Gray Testing Page for Taobao Instashopping Feature

Momentum Works Note: Taotian Group [淘天集团]  is Alibaba’s e-commerce unit formed in 2023 to oversee platforms like Taobao and Tmall; Taobao Xiaoshida [淘宝小时达] is Taobao’s instant retail service that enables consumers to receive products from local merchants within one hour through the Taobao app; Taobao Instashopping [淘宝闪购] is formerly known as Taobao Xiaoshida. This service was launched on April 30th. Ele.me [饿了么】is Alibaba’s food delivery platform. Taoxianda [淘鲜达】is Alibaba Group’s on-demand fresh produce delivery platform. The Same City Retail Business Group [同城零售事业群】is a business unit within Alibaba focused on mid-field retail — connecting local physical retail stores with online consumers in the same city, and enabling fast, often same-day delivery. 

After the Taobao Xiaoshida-Instashipping upgrade, the most notable changes are taking place across three key dimensions:

  • On the consumer side: Taobao Instashopping will launch a joint campaign with Ele.me , with subsidies expected to exceed RMB10 billion yuan (USD $1.8 billion). The campaign will offer promotions such as free orders and large-value discount coupons.
  • On the supply side: Ele.me’s entire supply network—including food delivery—will be made fully accessible to Taobao Instashopping. In addition, leveraging Taotian’s strong relationships with branded e-commerce merchants, Taobao will collaborate with their city warehouses and offline stores to establish branded instant retail flagship stores. The initial goal is to cover 200 major retail chains.
  • On the organisational side: all instant retail-related operations within the Taotian ecosystem will now be centrally managed by the Taobao Instashopping team, with Ele.me offering full operational support.

At the end of 2024, we analysed that although Meituan, Alibaba and JD.com appeared to be on different tracks, they were ultimately heading toward the same battleground. Recently, that confrontation has officially begun.

Meituan has expanded from delivering meals to also delivering alcohol, groceries, clothing, and electronics, recruiting retailers nationwide to set up flash warehouses (i.e., franchised dark stores). 

Meanwhile, Alibaba and JD.com have been trying to shorten their traditional long-distance national delivery models into city-level fulfillment. Now, quick commerce has become a secondary growth curve for all three platforms, and competition has become direct and intense.

According to our information, Taobao Instashopping originally planned to launch during the 618 Shopping Festival, with a limited pilot during the Labour Day holidays . The subsidy-fueled rivalry between JD.com and Meituan in the food delivery space — marked by public spats and aggressive promotions — captured the attention of consumers, merchants, and delivery riders. Riding on the heightened public interest, marketing incentives became more effective in driving traffic and engagement. Anticipating that JD.com’s heavy subsidies were unsustainable, Taobao Instashopping moved quickly, advancing its market entry to coincide with the Labour Day holidays shopping surge.A Taobao employee described their strategy as: “Water doesn’t race to be first, but seeks to flow continuously. This is a long-term competition.Taobao doesn’t plan to engage in verbal battles but will focus on subsidising consumers.”

On the quick commerce battlefield, both Alibaba and JD.com have taken a more aggressive stance by introducing prominent “Instashopping” and “Instant Delivery” sections on their main platforms. 

Unlike previous strategies, Alibaba has not solely relied on Ele.me but has simultaneously implemented substantial subsidies directly within Taobao. This approach allows Taobao to swiftly leverage Ele.me’s existing local infrastructure, including its network of warehouses and delivery personnel. By participating in joint subsidies, Taobao also aids in enhancing Ele.me’s operational efficiency. According to our understanding, Ele.me’s goal to achieve profitability this year remains unchanged, despite the subsidy-driven competition from Meituan and JD.com.

In terms of supply, Taobao has taken a different path from Meituan

Of Meituan Instashopping’s RMB200 billion (USD$36 billion) GMV in 2024, about one-fifth came from its flash warehouse model. In contrast, Taobao Instashopping prioritises mature brand supply through Tmall.

An Alibaba insider said, “Offline business is hard now, so brand merchants are more open.” We understand that when the Taobao Xiaoshida program first launched, it onboarded 20 top chain brands across more than 20,000 stores. With the upgrade to Taobao Instashopping, the goal is to accelerate coverage to 200 major chain brands.

The Taobao Xiaoshida entry was fully opened on Taobao’s homepage in July 2024, and a month later, over 3,000 authorised Apple reseller stores nationwide were integrated.

Over the past year, Taobao Xiaoshida tested nearly all product categories and found most popular products were in electronics, apparel, FMCG (mother & baby, personal care), flowers, food & fresh produce, pet supplies, and toys. As of April 30th 2025, over 3 million stores have joined the service.

In January 2025, leading fashion group Bestseller Group brought its three major brands — JACK & JONES, VERO MODA and ONLY onto Taobao Xiaoshida. Two months later, global sports brand Decathlon also onboarded onto Taobao Xiaoshida. According to Alibaba’s data, during the 2025 Women’s Day promotion (3/8), Decathlon’s hourly sales rose 665% day-on-day, ONLY grew nearly 300%, and JACK & JONES and VERO MODA also exceeded 200%.

After Taobao Xiaoshida introduced commission discount policies in April, more than 50 major brands joined the platform – including female fashion brands, MO&Co, CHARLES & KEITH, China’s innerwear brand Red Bean, and men’s brands such as Septwolves, Wensli, and Jeanswest.

In addition, MINISO’s “24-hour Super Stores” , which had been collaborating strongly with Meituan flash warehouses,  also joined Taobao Instashopping as well.

We also understand that Taobal Instashopping is also accelerating discussions and conducting “grey testing” (A phased rollout strategy that releases new features to a small group of users first) with two leading global apparel brands and retailers, which have not yet joined Meituan Instashopping.

Taobao Instashopping is also expanding into niche categories like document printing. Consumers can upload files, and a local partner will print and deliver the documents within an hour.

A secondary market analyst noted that Taobao Instashopping could be especially attractive to branded merchants, particularly in apparel. For instance, a brand could run livestreams on its Tmall flagship store, issue offline coupons, and allow Xiaoshida via Instashopping. If the item doesn’t fit, returns and exchanges are also quick.

That said, unbranded or white-label products are currently not a strong point for Taobao Instashopping.

At the Meituan Quick Commerce Conference in October 2024, Meituan Instashopping announced that it now operates around 30,000 flash warehouses. For these warehouses, white-label products (e.g., disposable towels, toothbrushes, cables) make up only 30%-40% of SKUs but contribute the bulk of profits, while branded goods have limited price margins due to transparency.

A front-end warehouse operator remarked that it’s not hard for Taobao to attract these warehouses, as they are open to multi-platform expansion for higher revenue.

Cross-team collaboration has been a breakthrough for Alibaba

Logistics is another key to quick commerce. Each platform’s delivery system is mostly crowdsourced. Apart from full-time riders, gig riders can deliver across platforms.

Meituan has about 7.5 million riders annually, mostly crowdsourced. Its high-frequency riders (those who work 260+ days a year, 6+ hours per day) reached around 820,000 in 2023, and that figure may now exceed 1 million.

This core group makes Meituan’s “30-minute delivery for everything” slogan plausible.

By contrast, JD.com’s Dada has disclosed 1.3 million annual active riders, with 30,000-40,000 working full time. As JD’s daily order volume reaches 10 million, this number may be rising. Ele.me has over 4 million registered riders, with about 1.2 million active daily, and 200,000 working full-time.

During peak periods, each platform prioritises orders within its own ecosystem for these nearly full-time riders.

According to our understanding, following the upgrade of Taobao Instashopping, Ele.me not only provides the majority of merchant supply for the service, but its Fengniao (Alibaba’s on-demand logistics platform that provides last-mile delivery services for food, groceries, and other local retail orders) couriers also handle the bulk of order deliveries.

However, in the eyes of a previously mentioned front warehouse entrepreneur, the biggest challenge for Taobao Instashopping lies in whether different internal teams within the Alibaba ecosystem can truly collaborate.

Alibaba history of Quick Commerce

Quick commerce is not a new initiative for Taobao. A year ago, Taobao’s app homepage was revamped, and Taobao grey tested a “Hourly delivery” service (also the translation for Taobao Xiaoshida)  at the top of the homepage. By July 2024, the Taobao Xiaoshida name and section was made official, and rolled out to all users on the homepage.

At that time, the Taobao Xiaoshida feature functioned more as a traffic entry point, aggregating offerings from Hema, RT-Mart, and Ele.me, while also opening up to all brands and merchants on the Taotian platform. Merchants could join in two ways: by launching a dedicated Taobao Xiaoshida flagship store, or by enabling the Xiaoshida feature within their existing Taobao or Tmall store—provided they had local inventory and could meet real-time delivery requirements.

However, merchants and entrepreneurs who joined the service back then faced the challenge of needing to integrate separately with Ele.me’s quick commerce system, Taoxianda, and other internal business units. After integrating into the Taobao Xiaoshida section, they also had to comply with e-commerce regulations such as traceability, purchase certifications, trademark authorisation, etc. As one participant commented, “Each business unit at Alibaba fought its own battle—it was chaotic.”

Now, with the upgrade to Taobao Instashopping, the situation has improved. At the very least, we know that the various business units involved in quick commerce within Alibaba have been unified under the management of the Taobao Instashopping team.

Alibaba’s layout in quick commerce began with its acquisition of Ele.me in 2018. Internal exploration within the Taobao ecosystem dates back to April 2020, when the Tmall Supermarket business unit was upgraded to the Local Retail Business Group, which encompassed Taoxianda , Tmall Supermarket, and Ele.me’s new retail services.

At the time, Alibaba had already introduced the framework of “long-field, mid-field, and short-field  retail,” referring respectively to nationwide retail via Taobao/Tmall, city-level operations via the Local Retail Group, and the 3-kilometer radius delivery service powered by Ele.me.

Note: Far-field Retail (远场零售): Nationwide e-commerce platforms like Taobao and Tmall, offering a wide product selection with delivery times typically ranging from 1 to 3 days; Mid-field Retail (中场零售): City-level services such as Taobao Xiaoshida, focusing on same-day or next-day delivery by leveraging local stores and warehouses; Near-field Retail (近场零售): Hyperlocal services like Ele.me, providing delivery within 30 to 60 minutes, catering to immediate needs like food and daily essentials.

 The future of Quick Commerce Ecosystem 

Today, the delivery speed of mid-field retail is rapidly catching up with that of near-field retail. This narrowing gap is a key reason why JD.com is making a foray into takeout to challenge Meituan, while Taobao is ramping up its Instashopping efforts. As e-commerce competition grows increasingly similar, all players are racing to win on speed—though each is charting a different path based on their own strengths.

When it comes to business integration, Alibaba has always taken a cautious approach. As early as 2020, when the Local Retail Business Group was formed, the industry anticipated a full consolidation of Alibaba’s related business units. However, for a company of Alibaba’s size, cross-department integration is the most difficult challenge.

The most typical example, as pointed out by many industry insiders, is that if the complexity of integration and corporate structure is not an issue, the best choice for Alibaba to fully commit to quick commerce would be to completely consolidate all relevant operations under one roof.

Taobao Instashopping still faces this daunting task today. Supply, delivery capacity, and coordination are all critical issues that it must tackle one by one going forward.