In the end, Alibaba has finally gone head-to-head with Meituan.

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Author | Huang Yu

Editor | Wang Xiaojuan

Nearly five months after Taobao Flash Sale joined the food delivery battle, the industry widely expected Alibaba would once again double down on the in-store group buying business, and now it has finally arrived.

Wallstreetcn has learned that on September 20, Taobao Flash Sale's in-store group buying business will first pilot in Shanghai, Shenzhen, and Jiaxing, and will be rolled out nationwide later. Similar to the food delivery business, the in-store group buying business will also be jointly laid out by Taobao Flash Sale and Ele.me, but will simultaneously go live on Taobao, Alipay, and Amap, the three largest traffic ports in the Alibaba ecosystem.

As a result, Alibaba has officially launched an all-around "siege" against Meituan's core business.

However, Amap, which was pushed into the spotlight by Alibaba just ten days ago, will not become the main operator for Alibaba's in-store group buying business for now.

In Alibaba's renewed push into the in-store group buying sector, Amap's role, besides bringing in traffic, also lies in the "Street Ranking" it launched ten days ago, similar to Meituan's Dianping rankings. This has been seen as the first step in Alibaba's launch of in-store group buying.

With this unveiling of the in-store group buying business, it is also officially declared that Alibaba will not activate Koubei, the platform that once carried its in-store business. However, for the above information, Alibaba has not yet responded to Wallstreetcn.

In fact, Taobao's plan to enter the in-store group buying business has long ceased to be a secret in the industry. Wallstreetcn found that already in August, several industry insiders revealed on social platforms that Taobao Flash Sale would be launching in-store group buying.

But a restaurant industry insider told Wallstreetcn that the original launch time given by Taobao-related personnel was even earlier, but due to some reasons it was postponed to September 20.

From April 30, when Alibaba upgraded its Taotian instant retail business "Hourly Delivery" to "Taobao Flash Sale," to September 10 when Amap released the Street Ranking, and now to the imminent launch of the in-store group buying business, Alibaba's local life puzzle is becoming more complete.

Obviously, Alibaba's move to ramp up the in-store group buying business is an important step in its local life strategy, with the core aim of building a complete "To-Home + To-Store" ecosystem, directly targeting the profit stronghold of Meituan, while seeking new growth curves for its main e-commerce business.

Amap can be seen as having fired the first shot for Alibaba’s push into in-store group buying.

On September 10, in the Amap app, a new feature "Amap Street Ranking" went live on the homepage, allowing users to comprehensively rate and rank merchants. At present, the rankings cover various sectors: the Premium List includes must-eat foods, must-visit attractions, must-stay hotels, and the Street Ranking features small local shops, local snacks, etc.

According to the introduction, the greatest feature of the Amap Street Ranking is that, based on 1.3 billion navigations by 51.32 million people over the past year, totaling 22.8 billion kilometers, it filters 1.18 million stores repeatedly visited by users, combines with Sesame Credit for genuine reviews, and generates the rankings.

At the same time, Amap launched the “Popular Store Support Plan,” encouraging users to make in-store purchases through measures such as distributing over 1 billion in subsidies.

At the press conference that day, Amap CEO Guo Ning declared: "Amap Street Ranking will never be commercialized. Authenticity is the core vitality of the ranking, and the core goal is a true reflection of user choices."

Morgan Stanley analysts Gary Yu and Joanne Lau pointed out in a recent research report: "The model of Amap Street Ranking is highly similar to Meituan Dianping; this move is a clear signal that Alibaba is renewing its push into in-store business, and will reshape the competitive landscape in the local life service sector."

So, against an industry giant like Meituan in in-store group buying, where does Alibaba's confidence to strike come from?

Great Wall Securities analysts believe that in-store business and to-home business have certain synergies, for example, merchant resources for in-store and takeaway can be shared. In addition, in-store consumption scenes are less complex than that of takeaway businesses, with fewer steps such as fulfillment and delivery, and greater profit margins.

Obviously, the achievements in the food delivery sector in recent months have also bolstered Alibaba's confidence to ramp up the in-store business.

At the August earnings call, Alibaba China E-Commerce CEO Jiang Fan detailed the Taobao Flash Sale strategy for the first time, noting that Taobao Flash Sale has exceeded expectations in order volume, user scale, supply, and logistics capacity. Food delivery orders have already led the industry, and Taobao Flash Sale has exceeded its stage goals in both scale and user mindset, with a long-term aim to achieve industry-leading efficiency.

Reportedly, in August this year, Taobao Flash Sale's peak daily orders reached 120 million, with a weekly average daily order volume of 80 million. This drove the monthly active buyers for Flash Sale to 300 million, a 200% increase compared with April of this year.

On the merchant supply side, Jiang Fan revealed that in the recent period, with rapid business growth, a large number of new merchants joined Taobao Flash Sale, especially high-quality suppliers reaching industry-leading levels.

For Taobao's core e-commerce business, food delivery is also a good business: in the first three weeks of August, it boosted Taobao app's monthly active consumers by 25% year-on-year.

Jiang Fan predicts that in the next three years, as a million brand stores join, Flash Sale and instant retail will bring an incremental transaction volume of 1 trillion yuan to the Taobao platform.

Now, the effort to build a great consumer platform is moving in step with "AI + Cloud" at the Alibaba Group level. As an important piece of the consumer platform puzzle, one can imagine Alibaba will invest heavily in the in-store group buying business.

From food delivery to in-store, Meituan, as the incumbent defending its turf, is also actively fighting back. This battle for dominance in local life services is unlikely to end any time soon.

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