According to Hu Qiugen, Alibaba’s instant commerce unit’s general manager, with this technical support, each store will ensure that ‘one-stop, 24-hour and 30-minute delivery’ services are available to consumers.
Alibaba Group Holding announced that it will invest 2 billion yuan ($281 million) in a program where Taobao convenience stores across China support its instant commerce and on-demand delivery business. While Taobao Shangou owns a string of brick-and-mortar shops, these investments will go into revamping the technological capabilities of existing convenience stores. This is also a testament to the advanced digital infrastructure under Alibaba’s wings.
Under the terms of the agreement, Alibaba will provide the operators of partner convenience stores with digital supply chain support from 1688.com, which is its domestic wholesale unit. Technical support to enable more efficient product procurement and restocking of the inventories will also be done under its Aoxiang platform, along with Taobao branding.
According to Hu Qiugen, Alibaba’s instant commerce unit’s general manager, with this technical support, each store will ensure that ‘one-stop, 24-hour and 30-minute delivery’ services are available to consumers. Taobao partner convenience stores are expected to be set up in over 200 locations across China. Hu also added that the first batch of these convenience stores was launched last week in multiple cities, like Hangzhou and Nanjing, to name a few.
Through this initiative, the Hangzhou-headquartered Alibaba is delving further into the expansion of the scope of goods and merchants as part of its instant commerce boost. This program has been introduced a mere two months after the company CEO, Eddie Wu Yongming, said that Alibaba’s user base was increasing and the platform was quickly overtaking rival companies like Meituan and JD.com.
In August, this Chinese tech conglomerate’s CEO said that the company had won ‘consumer mindshare’ as it was pushing its instant commerce initiative to regain growth in China’s highly competitive domestic market. Yongming was confident that the company’s recent performance reflects its capabilities could set the bar for efficiency in the industry in the long run.
This enthusiasm was a result of Alibaba reporting a 78% jump in profit for the June quarter, while robust AI demand was credited for the 26% revenue growth for its cloud business. As this news broke, the e-commerce giant’s shares jumped a whopping 13% and closed at $135.
The increase in public cloud revenue, which includes the growing uptake of AI-related goods, was the primary driver of this growth pace. For the eighth consecutive quarter, revenue from AI-related products continued to climb in triple digits year over year.
Along with start-ups DeepSeek and Moonshot AI, among others, Alibaba has become one of China’s leading AI developers as it intensifies the open-source strategy by allowing other developers to use, alter, and distribute its AI models. The uncertainties surrounding the availability of AI processors did not deter Alibaba either.
The Taobao Instant Commerce initiative was launched in April and has helped Alibaba push its standing in the Chinese market. Through this program, the company has established itself as the ‘go-to’ platform, providing customers with a massive range of products like food, groceries, electronics and apparel.
The Taobao shopping app can be used to access Taobao Shangou, and in its network, over one-third of the traditional convenience stores are currently open 24/7. Alibaba reports that Taobao Shangou’s daily orders reached up to 120 million, while its monthly active users exceeded 300 million in August. The Chinese Ministry of Commerce’s Chinese Academy of International Trade and Economic Cooperation predicts that the nation’s instant commerce sector will grow to 2 trillion yuan.
Alibaba is not the only company pushing its instant commerce programs. It’s Beijing-based Meituan claims to have over 500 million users and announced a partnership with over 10,000 brands last week. Meituan will help these brands develop virtual stores on its platform and also offer the necessary digital tools, warehousing and logistics support.