China's Instant Commerce War: A Global Playbook

How an Epic Clash is Rewriting the Global Future of Retail

The ongoing intense competition in China's instant commerce market is not just a domestic battle for sales; it's a strategic war to fundamentally reshape consumer behavior. Heavyweights like JD.com, Alibaba, and Meituan are using massive subsidies and technological innovation to create a new retail paradigm. This instant commerce war offers a crucial "playbook" for the rest of the world, especially the APAC region, on the future of retail.

credit: Xiao Hongshu

Let’s start with the Rise of Quick Commerce in APAC

The instant commerce trend, often called "quick commerce," is gaining significant traction across APAC. As Therese Reyes of Canvas8 noted, quick commerce now accounts for more than two-thirds of online grocery orders in India. Other countries in the region are also seeing rapid growth.

"Unlike India and Southeast Asia, quick commerce in Australia is still fairly nascent, but it's growing fast," says Stephanie Winkler, former head of Crowd DNA, now a cultural researcher and brand strategist with expertise in the APAC region. "Market analysts are forecasting 25% compound annual growth (CAGR) between now and 2031, which is incredibly high," Winkler explains that APAC is uniquely suited for this growth because it's a mobile-first region. Consumers have higher expectations for speed and seamlessness than their counterparts in Western Europe or the US. China's established cashless culture and advanced "super app" ecosystem have paved the way, making it the perfect laboratory for these new retail models.

Indeed, what's happening in China right now is an epic instant commerce war, providing a valuable case study for the rest of the world.

First, what is the “instant commerce war” in China?

In July 2025, an epic instant commerce war erupted in China among three heavyweight players: JD.com, Alibaba, and Meituan. They have pledged billions in subsidies to entice consumers and merchants. This war reached its peak on July 5th and has been raging into August with no end in sight. It's a zero-sum battle so intense that billions of dollars have been burned in a very short time, with no obvious winner yet. Meituan’s and JD’s shares have both fallen by about 22% and 10% this year, respectively.

For now, the primary beneficiaries are consumers. Many hope the war never ends, as they've been able to fill their fridges with insanely low-priced beverages thanks to a continuous stream of coupons. In the past month, I ordered beverages on Meituan or Taobao's flash shopping every day, with each cup of latte or Americano costing no more than 10 yuan ($1.39) and some iced lemon tea even as low as 1 yuan ($0.14) for a 1000ml "Bawang" cup.

But how long can this last? The short-term gains for consumers will likely be temporary. The long-term goal for JD, Alibaba, and Meituan is to use these huge investments to build new consumer habits. The question is whether consumers will ultimately foot the bill once the subsidies end.

But for now, the war has already rewritten the future of retail. Here are some key takeaways from the instant commerce war:

The Core Is About Reshaping Consumer Behavior

This war isn't just about sales; it's about shaping future consumer behavior. Unlike the rest of APAC, the new model in China, which is called "instant commerce" or "flash sales," is about more than just speed. It's about nurturing the consumer's desire for immediate gratification—getting what you want, when you want it. The standard delivery time is intended to be just 30 minutes for everything from food and groceries to 3C products (Computer, Communication, and Consumer Electronics).

This new behavior shifts consumer habits from one purchase every few days on traditional e-commerce platforms like Taobao/Tmall, to multiple purchases per day on instant commerce platforms like Meituan. The hypothesis is simple: once consumers get hooked on this level of convenience, they'll become addicted to making more frequent, spontaneous purchases. If this proves true, it will be a new growth engine for e-commerce giants, especially during economic downturns when consumers are more hesitant to spend.

However, this isn't a guaranteed success with China’s deflation playing as a deciding factor. Additionally, the time for a habit to form is commonly estimated at around 66 days, but it can range from 18 to 254 days, according to recent research. Since low prices are the main draw for most consumers, they might discontinue spending or spend less on instant commerce platforms once the subsidies diminish. It’s highly possible that the expected profits won't materialize, and the new consumption behavior won't take root.

The Promise of "30-Minute Delivery for Anything" will become the standard

One of the prominent evolutions disrupting the game is that instant commerce has extended its main food delivery service to non-food categories. According to Taobao (under Alibaba), since its "flash shopping 闪购" launch, the number of new merchants has increased by 39%. Among these new merchants, digital products, 3C, mother and baby products, home cleaning, and daily essentials are the fastest-growing categories. The instant commerce war has sped up traditional non-food delivery, normally taking 1 or 2 days, to within just 30 minutes. This brings unprecedented convenience for an already impatient consumer base and largely stimulates them to make more impulse purchases on instant commerce platforms instead of conventional e-commerce or social commerce platforms.

With the competition escalating in instant commerce, the major players like JD, Alibaba, and Meituan, as well as their merchants and brands, will underscore speedy delivery for a massive range of categories. This will involve investing in building more cloud warehouse stores through integrated digital systems and new technology. The current promise—"30-minute delivery for anything" (30分钟送万物)—will soon kick in and become the standard.

A Glimpse Into The Future Of Retail: A Symbiotic Ecosystem

Since China is so advanced in its retail revolution, it serves as a lab to observe many advanced experiments happening ahead of the APAC region and the rest of the world. From a historical perspective, retail doesn't evolve linearly; it develops in a circular, symbiotic system where different models coexist and thrive.

Every retail revolution has been accompanied by a major shift in consumption behaviors. First, the e-commerce platform, like Taobao, lured consumers to online shopping and spurred brands to undergo a digital transformation. Then, with social commerce rising, consumers swarmed to Xiao Hongshu (Red Note) and Douyin (TikTok in China) to make purchase decisions based on content embedded in social posts. Now here comes instant commerce, trying to nurture a new consumption habit and behavior to increase purchase frequency.

However, each form of retail advancement cannot completely replace the one before it. That is why Taobao and Tmall have partnered with Xiao Hongshu, where users can click on links within posts and be redirected to Taobao to complete a seamless purchase.

As well, a reverse trend is emerging. More and more mature brands with flagship stores on Tmall exceeding 1 billion RMB ($137 million) in GMV are choosing to open physical stores, according to the Tmall Emerging Brand Growth White Paper. The trajectory for these brands seems to point to one clear pattern: establishing a strong online presence first, then expanding into offline retail. The warmth and immersive, in-person experience is far more crucial to a brand's fate and cannot be simply replaced by algorithms. That is why we are witnessing the huge success of indie Chinese brands like Songmont and Documents, which spare no effort to meticulously select locations and curate impactful, unique storytelling through the design of their offline flagship shops.

The future of retail will be a symbiotic ecosystem where different models—online, social, and physical—complement and collaborate with each other, creating a seamless experience for consumers that moves fluidly from online to offline and back again.

credit: Xiao Hongshu