Alibaba plans to continue significant investment in its Taobao Quick Purchase service, expressing no concern over potential losses for the next three years.

The new round of instant retail competition has commenced earlier than anticipated, coinciding with the ongoing battle among AI assistants. Alibaba's core management, in an internal meeting held in early 2026, encouraged the team to aggressively pursue the Quick Purchase initiative without being burdened by profitability concerns for the next three years.

Alibaba founder Jack Ma has previously stated internally that "Taobao Quick Purchase is a battle of milestone significance for the group."

It is understood that the investment intensity for Taobao Quick Purchase throughout 2026 will surpass that of the previous year, with a primary focus on instant retail.

The aforementioned internal communication also outlined several key priorities for Taobao Quick Purchase:

The food delivery business should be pursued with restraint and greater purpose. The focus will be on orders with high average order values exceeding 30 yuan, alongside multi-dimensional improvements in delivery operations for refined management.

For instant retail, the approach involves identifying and focusing on specific product categories one by one. Priority will be given to businesses where speed requirements exceed traditional e-commerce capabilities and annual sales exceed 10 billion yuan, such as pharmaceuticals, alcohol, and fresh produce. The top priority for instant retail in 2026 is warehouse construction.

The local services business currently remains small in scale. Alibaba management's stance is to continue its development in 2026, exploring various scenarios like intra-city services and tourism to drive growth in this area.

Taobao Quick Purchase's original plan was to launch its first major campaign in mid-March, a period when delivery riders and merchants have typically returned from their hometowns and resumed normal operations. A larger campaign was planned for the summer, aiming to achieve the 2026 goal of surpassing Meituan in market share.

However, in early February, Alibaba's AI assistant app, Qianwen, announced a 30 billion yuan initiative to subsidize consumer spending on food, beverages, and entertainment during the Spring Festival. Within just nine hours of launch, Taobao Quick Purchase received 10 million orders through the Qianwen platform. Shortly after, Taobao Quick Purchase announced an additional investment of nearly 20 billion yuan to subsidize delivery riders working during the holiday period, bringing the total spending to approximately 50 billion yuan, a figure comparable to Meituan's expenditures.

Three major companies are competing for the AI interface using their respective strengths: ByteDance secured the partnership with China Central Television's Spring Festival Gala, aiming for its Doubao app to replicate the success of Deepseek from the previous year. Yuanbao, leveraging Tencent's dominant social advantage, is attracting new users through simple red packet sharing mechanisms. Alibaba is utilizing its diverse consumer products to help cultivate user habits for Qianwen.

The Spring Festival AI assistant competition prompted Taobao Quick Purchase's counteroffensive to begin ahead of schedule.

During the winter season, rider shortages are common. Meituan launched counterattacks in northern China, while Taobao made advances in the south.

Currently, the food delivery market structure is relatively stable, with Meituan and Taobao Quick Purchase holding over 50% and 40% market share respectively, while JD.com holds less than 5%.

Since November of last year, Alibaba has shifted its primary focus away from merely pursuing order volume growth. Instead, while maintaining market share, the company aims to increase the proportion of "high-quality orders" valued over 30 yuan to 60%.

To achieve this, Taobao Quick Purchase has progressively raised the subsidy threshold over the past six months, increasing it from 15 yuan to 30 yuan and then to 40 yuan. Currently, the average subsidy per Taobao Quick Purchase order is strictly controlled within 4 yuan, and the loss per order is also capped at 4 yuan.

Achieving these targets still requires time. As of December 2025, the proportion of low-priced orders below 15 yuan on Taobao Quick Purchase remained higher than that of Meituan. Meituan also emphasizes market share calculated based on high-quality orders, with its proportion of orders over 30 yuan hovering between 65% and 70%.

Winter is Meituan's advantageous season. As riders return to their hometowns and cold weather in the north discourages part-time riders, Meituan's long-established rider station network better ensures delivery capacity. Since the start of winter, Meituan has adjusted subsidies and mobilized suppliers in an attempt to recapture market share lost during the milk tea battle competition.

Competition between the two also focuses on fulfillment capabilities. Taobao Quick Purchase believes that matching Meituan's delivery speed is key to solidifying user loyalty.

Under the leadership of its head, Wu Zeming, Taobao Quick Purchase has primarily developed four core capabilities, refining previously coarse metrics and classifications:

The "Supercomputing System" can simulate the required number and combination of riders under different delivery time targets, maximizing cost reduction and efficiency improvement. Instead of broadly predicting total delivery times, it optimizes each segment of the delivery process individually.

Strengthened collaboration with merchants: Taobao Quick Purchase uses algorithms to more accurately estimate food preparation times. Sometimes the system estimates 10 minutes, but preparation finishes in 5 minutes. More accurate estimations allow for better rider dispatch timing and more effective recommendations for faster-preparing merchants.

Introduction of various expedited delivery products, such as "1V1 Delivery," which can reduce average delivery times by 8-20 minutes. Riders receive subsidies per order for this service, directly competing with Meituan's "1-to-1 Express Delivery."

Expansion of the delivery capacity system. Taobao Quick Purchase's Humniao delivery lines have expanded from dedicated, premium, and standard lines to nearly 10 lines, including premium long-distance and Humpao.

The expedited delivery products and rider classifications of Taobao Quick Purchase and Meituan are almost directly comparable. For instance, both prioritize expedited delivery for high-tier users and establish dedicated delivery pools for peak scenarios. Both platforms have refined their multiple delivery lines, but the core stable capacity remains deeply integrated with the platform, such as dedicated and premium lines, which function similarly to full-time riders. Taobao Quick Purchase's stable capacity covers nearly 80% of order volume in many regions.

In southern China, where riders are relatively less scarce, Taobao Quick Purchase has made more progress. In Guangzhou and Shenzhen, where Taobao Quick Purchase's delivery times previously lagged behind Meituan by 3-5 minutes, it has now surpassed Meituan. Chengdu and Chongqing, once strongholds for Meituan providing cash flow for subsidy battles in East China, are now seeing Taobao Quick Purchase's market share approach that of Meituan.

As order density increases, Taobao Quick Purchase finds it easier to recruit riders, leading to higher delivery efficiency. Wuhan has become the fourth city where Taobao Quick Purchase handles over one million daily orders, with daily orders stabilizing at 1.2 million. Taobao Quick Purchase's local market share there has increased from 40% to nearly 60%.

An insider from Taobao Quick Purchase stated that competition in food delivery has entered a "close-quarters combat phase," where execution details are paramount.

Instant retail requires longer-term investment and is currently still in the warehouse construction phase.

Providing qualified food delivery primarily involves integrating most restaurants and ensuring delivery speed. However, instant retail involves selling hundreds of thousands of SKUs, making development slower and necessitating a market-by-market approach.

Pharmaceuticals, alcohol, and fresh produce represent obvious immediate needs, but Taobao Quick Purchase lags behind competitors in these areas. In pharmaceuticals, user loyalty has been insufficient, and Taobao Quick Purchase is urgently working on its supplier pool and service offerings. In alcohol, Meituan's Waima Songjiu and JD.com's Jiushijie have had a head start. For fresh produce, Taobao Quick Purchase is accelerating collaboration with Freshippo in the front-end warehouse model.

Alibaba's advantage in food delivery and instant retail lies in the shopping traffic from its main Taobao platform, which is several times greater than that of Meituan and JD.com.

Taobao's e-commerce pages have begun directing traffic to instant retail. On the product pages of some brands' Tmall flagship stores, such as Pechoin, Only, Apple Authorized Specialty Store, Decathlon, and Babycare, a "Quick Purchase" tab has started appearing in the banner area.

Search accounts for approximately half of the product traffic on Taobao's main site. Now, when users search for keywords like "beer," the top result may directly display a Quick Purchase option from Freshippo or brands offering "fresh direct delivery." This represents a significant step in integrating Taobao's main site traffic with Quick Purchase.

Traffic addresses "visibility," but the real infrastructure for instant retail remains the warehouse.

Since July 2025, Tmall Supermarket has accelerated the construction of front-end warehouses specifically dedicated to the instant retail format. It has also opened a store within the Taobao Quick Purchase channel, offering delivery options like half-day and 4-hour delivery. Currently, Tmall Supermarket warehouses cover approximately 40 cities.

According to industry estimates, Taobao Quick Purchase's daily instant retail order volume has stabilized at around 10 million orders, roughly half that of Meituan. The traditional supermarket/convenience store system, front-end warehouses, and Freshippo each account for about 20%, while Tmall Supermarket's share is close to 12%.

Currently, multiple Alibaba businesses are constructing delivery warehouses for the instant retail operation:

1. Freshippo already operates about 200 front-end warehouses and plans to add at least 100 more in 2026. 2. The 4-hour fulfillment warehouses resulting from the collaboration between Tmall Industry and Cainiao Network are still in the exploratory phase. 3. Tmall Supermarket warehouses serve both Tmall Supermarket's self-operated supply and are open to third-party brand merchants. 4. Taobao Convenience Stores, also known as Flash Warehouses, are continuously iterating. The standard 400-square-meter store model ranks first in average single-store output among Taobao Quick Purchase warehouse merchants. As of February, Taobao Convenience Stores have expanded to over 100 cities.

In December 2025, Pechoin partnered with Taobao Quick Purchase, integrating its products into the platform's 4-hour fulfillment warehouses in six cities: Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen, and Suzhou. One month later, Pechoin's online channel manager reported that nearly 10% of the GMV from its Tmall flagship store was being fulfilled through Taobao Quick Purchase. While 10% seems significant, it is difficult to determine if this represents purely incremental sales or substitution from other channels.

Taobao Quick Purchase has followed Qianwen into the next battlefield.

Broadly speaking, Alibaba's e-commerce can be divided into far-field and near-field e-commerce. Far-field e-commerce, comprising Taobao and Tmall, involves delivery within two to three days via courier. Near-field e-commerce includes Taobao Quick Purchase, Freshippo, Tmall Supermarket, etc., with delivery times ranging from as fast as 30 minutes to a maximum of half a day.

Alibaba has internally discussed multiple times the possibility of merging businesses highly relevant to near-field e-commerce, such as Freshippo and Tmall Supermarket. However, the complexities of each business have so far prevented any actual organizational restructuring. This state of being "related but not merged" perpetuates issues regarding business boundaries.

An Alibaba insider noted that whenever cross-team collaboration is required, it becomes difficult to find a single person truly responsible for the details. The lack of a clear single point of contact means many decisions can only move forward through continuous negotiation and compromise—the problem isn't a lack of people doing the work, but uncertainty over "who ultimately owns this project."

With the onset of the AI interface battle, Taobao Quick Purchase has been assigned new tasks.

ByteDance's Volcano Engine became the exclusive AI cloud partner for the 2026 CCTV Spring Festival Gala, with Doubao playing a deep role. It is understood that ByteDance spent 11 billion yuan on this. Qianwen partnered with four major satellite TV stations, with total expenditures less than one-tenth of ByteDance's.

Tencent aimed to attract new users to Yuanbao with 1 billion yuan in red packets. Beyond acquiring new users, Alibaba planned to spend an additional 30 billion yuan to cultivate users' habits of making lifestyle consumption through the AI interface. Qianwen's primary consumption supply comes from Taobao Quick Purchase. The "free order card" tactic was reintroduced, attempting to lure users into a new interactive scenario with a "free order."

A practical concern is whether, if Qianwen successfully establishes the user habit of "shopping via AI" at great cost, the ultimate benefits might be reaped by AI assistants with larger user bases, like Doubao. An Alibaba insider stated, "Worrying about that now is useless; the priority is to establish the habit first."

However, many consumers during the Spring Festival might have found it difficult to actually claim Qianwen's "free order" products. At 4 PM on February 6th, Qianwen announced receiving over 10 million orders within nine hours of the free order campaign's launch. However, for four to five hours during that period, many users experienced system crashes preventing orders. In the following days, users attempting to order via Qianwen were sometimes advised to wait until after the holiday.

A Qianwen insider explained, "The instantaneous traffic volume was too large. Every link in the chain, from claiming coupons to placing orders and finally to payment, experienced complete breakdowns."

In traditional Taobao shopping or ordering milk tea via Taobao Quick Purchase, the platform processes highly deterministic instructions, a task Alibaba Cloud has long mastered. However, placing orders through Qianwen involves natural language processing tasks, consuming GPU resources, with the computational cost per order potentially being dozens of times higher than a traditional e-commerce transaction.

The challenges included both a shortage of processors and a shortage of riders. To compete for delivery capacity, Taobao Quick Purchase announced a 20 billion yuan investment in riders during the holiday period, offering a 2,500 yuan referral fee for bringing in a new rider. New riders who completed deliveries for three weeks under certain conditions could receive an additional bonus of up to 10,800 yuan. Meituan also offered incentives ranging from 5,000 to 10,000 yuan for riders remaining on duty, along with additional subsidies and activity bonuses.

Much like the early days of Singles' Day, various Alibaba departments were pushed forward by the surge in orders, solving problems and refining systems through hectic overtime work. Consequently, the DAU for the Qianwen app surged from 10 million to approximately 75 million on February 7th.

It is understood that during the Spring Festival, Qianwen might also launch features for purchasing movie tickets and topping up mobile phone credits.

The subsidy war over the past several months has challenged previous expectations regarding the moats of these platforms. A Meituan employee remarked that food delivery is a business with low entry barriers but high operational difficulty, adding, "But when any industry burns through 100 billion yuan, discussing moats becomes meaningless."

The reverse is also true for Alibaba or other platforms. If parties invest massive funds to establish AI as the new generation's consumption入口, the moats once built upon merchants and orders could potentially vanish.