Taobao Flash Sale Launches Group Buying on Saturday, Challenging Meituan & Dianping
BEIJING - Taobao Flash Sale is set to launch a group buying business this Saturday, aiming to compete with established players Meituan and Dianping, particularly during the upcoming “National Day Golden Week.” This move comes as alibaba expands its presence in the local life services sector, launching a two-pronged approach alongside Gaode (Amap).
According to reports from mainland media outlet “LatePost,” Taobao Flash Sale will focus on group buying, partnering with Ele.me for fulfillment, while Gaode’s “Gaode Street Sweeping List” will concentrate on local life content. Currently, the two business teams operate independently, with no immediate plans for merger announced.
Jiang Fan, CEO of Alibaba E-commerce Business Group, previously noted user demand for in-store group purchases among Taobao Flash Sale users, indicating a planned expansion into diversified services with potential collaboration with home delivery businesses.
The initial rollout will feature catering group buying, including high-frequency consumer categories like beverages, Chinese formal meals, bread and desserts, chain fast food, and special snacks. The first wave of participating brands includes national chains such as Naixue’s Tea and Taotaoju, alongside local brands like Xunxiangji.
This launch is strategically timed for Saturday, typically the peak order day for Taobao Flash Sale’s instant delivery service, hoping to capitalize on increased customer flow during the holiday period.
Alibaba has previously tested in-store business in Shanghai, Shenzhen, and Jiaxing, chosen for their strategic importance within the Ele.me network, allowing for thorough experimentation. The Alibaba Group Shopping business team currently dedicated to this effort numbers in the hundreds.
Analysts at Morgan Stanley predict Alibaba’s entry into the in-store business will put further pressure on Meituan’s profitability. Their report estimates Meituan’s core local businesses could face operating losses of up to 10 billion yuan, with instant delivery accounting for 15 billion yuan in losses and the in-store business generating a profit of 5 billion yuan. The lower entry barrier for in-store business is cited as a key factor in this projection.
