China’s e-commerce players rush into instant retail with heavy cost

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Shanghai: China’s top online shopping companies, Alibaba and JD.com, are spreading quick retail – where delivery arrives within 30 to 60 minutes.

However, this pressure is coming to a higher price, as they offer a big waiver to attract consumers and counter the market share.

When JD.com reports Tuesday and Alibaba’s quarterly income on Thursday, investors will end the strategy, as it has been difficult for China’s largest online retailers to find new ways for development.

Their market penetration is already high and the prices of goods are under pressure due to employment and wage concerns as well as consumers’ slowdown due to a long property market misery.

The new turf war focused at high -speed is coming to a higher price in the short term as e -commerce giants persuade consumers with heavy discounts.

JD.com’s JD Techway and Alibaba’s Food Delivery app last month promised 10 billion yuan ($ 1.38 billion) in subsidy. JD Techway said it would invest money in a year, while eleven did not disclose the timeframe.

“The competition is so severe, there are no opportunities for a lot of additions, so everyone is going to every area and the quick retail is the latest example,” said Jason Yu, general manager of CTR Market Research.

China’s Food Delivery Market leader Metwan has been mobilizing to expand his business by expanding his Instations platform, which provides non -food supplies within 30 minutes, and JD.com announced to enter food supply in February.

Yu said, “In the past, people used to go to JD.com to buy mobile phones and they would convey it to you the same day, then suddenly they could go to meito and apply Apple iPhone within 30 minutes.

At the end of April, Alibaba extended his immediate shopping portal on his home e -commerce app Taobao. This gave users access to restaurants, coffee shops and bubble tea chains, which are available at Alibaba’s eleven.

Alibaba, JD.com and Metovan did not respond to the requests for comment.

Alibaba and JD.com are welcomed by the cost of subsidized subsidies from the cost of cost.

JD Techway users currently enjoy up to 20 yuan or 77 2.77 daily for supply from restaurants, including McDonald’s, Headelo and Burger King. On the immediate shopping portal of Taoobao, consumers can get 11 yuan exemptions on at least 15 yuan bills.

Liu Qi, 24, a small business owner in Tanjan, said he was happy when he recently bought a coconut late on the JD -Takeway in just 5.9 yuan.

Liu said, “I asked delivery man and said he made 4 yuan in every delivery, so basically, JD.com bought me a cup of coffee and brought it to my door.”

He was even more surprised after days when he bought coffee in just 3.9 yuan at the Tobao’s quick shopping portal. “It was 2 yuan cheap than JD.com!” He said.

The breasts of war

Although it is expensive to subsidize the user’s waiver for the quick retail, China’s e -commerce giants have important cash reserves. According to Morning Star analysts, by December 31, Alibaba, JD.com and Metwan had net cash positions of 400 billion, 144 billion and 110 billion yuan, respectively.

Analysts say that despite the low margins in the business, a new focus on the retail focus was to some extent for JD.com and Alibaba, as the two firms already have an army of couriers in their power.

This means that the delivery infrastructure does not require expensive construction because other potential incomes such as Temu-owner PDD holdings are essential.

Alibaba and JD.com are taking advantage of high frequency demand for diet, coffee and bubble tea to increase demand for low frequency demand for clothing, electronics and other high margin purchases for clothing, electronics and other high margin purchases.

He said that for JD.com, the quick retail expansion was especially important as its traditional e -commerce business has targeted the roof.

“He has to try to get a market share in new business areas.”