Taobao Instant Commerce, Alibaba’s push into on-demand retail, unveiled a RMB 50 billion ($6.98 billion) subsidy initiative on July 2. Over the next 12 months, the platform will roll out large consumer incentives including vouchers, free-order cards, and subsidized fixed-price items, alongside merchant-focused measures such as store subsidies, product-level discounts, delivery subsidies, and commission waivers.

As China’s traditional e-commerce growth plateaus, major platforms are turning to high-frequency services like instant retail to drive more frequent app visits and incremental orders. Taobao, with its monthly active user base already at 928 million in March – far ahead of PDD’s 677 million and JD.com’s 507 million, according to QuestMobile – sees instant commerce as a key lever to boost engagement and tap into consumers’ growing appetite for speed.

Alibaba sees Taobao Instant Commerce as a high-frequency scenario that can drive both user growth and engagement on its flagship platform. The company believes there is still significant untapped potential in converting traditional e-commerce shoppers into instant retail consumers, as people familiar with the matter told Caixin.

Taobao’s push into on-demand accelerated on May 2, when its “Xiaoshida” service was rebranded to Taobao Instant Commerce and given a prominent first-level homepage entry. The platform ramped up joint promotions with Ele.me, offering free-order coupons, heavily discounted food delivery, and opened Ele.me’s supply fully to Taobao Instant Commerce to ensure last-mile performance.

• Meanwhile, rival JD.com is leveraging food delivery as a frequent-entry point to funnel traffic back to its core e-commerce platform. Heavy subsidies have delivered tangible gains: during the 618 campaign, JD.com’s daily active users hit an all-time high, with order-placing users more than doubling year-on-year.