Alibaba’s ‘instant commerce’ bet pays off as Taobao attracts over 100 million new orders
From milk tea to smartphones in under an hour, Taobao Shangou gains traction as retail giant uses subsidies and speed to fend off rivals
Alibaba Group Holding is seeing solid early results from its push into “instant commerce”, a shopping model the Chinese technology giant hopes will drive sales growth amid sluggish consumer spending and intensifying e-commerce competition.
According to the latest company data, Taobao Shangou – Alibaba’s “instant buy and instant delivery” service – generated more than 100 million orders from new users brought to the Taobao app during the first three weeks of the Singles’ Day shopping festival as of Wednesday.
The results suggest Alibaba’s strategy of attracting new consumers through heavy subsidies on everyday items such as milk tea and lunchboxes is paying off, justifying the Hangzhou-based company’s large investment in the model and strengthening its position against rivals including Meituan, PDD Holdings and JD.com.
Launched in late April, Taobao Shangou was now “a major driver of brand growth and significantly boosted e-commerce sales”, Alibaba’s Taobao and Tmall unit said in a statement on Thursday. Alibaba owns the South China Morning Post.
As consumers grew accustomed to instant deliveries for drinks and meals, they were increasingly ordering other products, from shampoos to smartphones, analysts noted.