《Instant Retail Market Surpasses 600 Billion Yuan in 618 Festival 2026: Meituan vs Alibaba Battle Enters New Phase》 - 行业洞察

Instant Retail Market Surpasses 600 Billion Yuan in 618 Festival 2026: Meituan vs Alibaba Battle Enters New Phase

Instant Retail Market Scale and Growth Momentum

The instant retail market in China demonstrated explosive growth during the 2026 "618" Shopping Festival, with sales reaching 628 billion yuan, representing a year-on-year increase of 112.3%. According to data from Star Chart Data, the total GMV across comprehensive ecommerce platforms, instant retail, and community group buying reached 934 billion yuan, up 4% year-on-year, though the growth rate significantly declined from 20.9% in the same period of 2025.

The market size of instant retail reached 781 billion yuan in 2024, with a year-on-year growth of 20.15% according to the Ministry of Commerce Research Institute. The market is expected to exceed 1 trillion yuan in 2026 and reach 2 trillion yuan by 2030. This trajectory indicates that instant retail is no longer a complementary channel but a core battleground for retail dominance.

Three major platforms currently dominate the instant retail landscape. Taobao Flash Shopping and Meituan Flash Shopping collectively account for over 90% of industry transaction volume. JD.com's Jingmiaosong ranks third with 8.4% market share, while Douyin holds only 1.5%. The market structure has shifted from "one dominant player" to "two strong competitors," marking the completion of consumer mindset migration.

Meituan's Q1 2026 Performance: Loss Reduction Strategy Takes Effect

Meituan released its Q1 2026 financial report on June 1, revealing revenue of 91 billion yuan, a year-on-year increase of 5.6%. The net loss was 6.827 billion yuan, with adjusted net loss after excluding factors such as equity incentives and investment income at 4.968 billion yuan. The narrowing loss trend is evident, following net losses of 18.632 billion yuan and 12.957 billion yuan in the previous two quarters.

The most significant highlight of Meituan's Q1 financial report is the substantial reduction in losses. The sales and marketing expenses in the quarter decreased by 8.757 billion yuan quarter-on-quarter, while sales costs decreased by 2.901 billion yuan quarter-on-quarter. The adjusted EBITA loss of the core local commercial business narrowed from 10 billion yuan in the previous quarter to 2 billion yuan, a quarter-on-quarter loss reduction of 8 billion yuan, exceeding market expectations.

Meituan has adjusted its revenue disclosure caliber starting from Q1 2026, separately disclosing "commodity sales revenue" from new businesses, mainly from self-operated retail businesses such as Xiaoxiang Supermarket, pharmaceuticals, and alcohol. In the first quarter, Meituan's commodity sales revenue reached 21 billion yuan, a year-on-year increase of 46.6%, accounting for 23% of total revenue. This adjustment signals Meituan's strategic repositioning as a "retail company" rather than just a food delivery platform.

According to Dolphin Research estimates, in Q1, the overall per-order loss of Meituan's food delivery and flash shopping has dropped to 1-1.1 yuan, better than the market expectation of 1.4 yuan. Wang Xing mentioned in the earnings call that if competition becomes more rational, significant improvement in unit economics is expected in Q2.

Alibaba's Instant Retail Offensive: Massive Investment for Market Share

Alibaba has demonstrated a strong sense of crisis in the instant retail track over the past year. In the fourth quarter of fiscal year 2026, Alibaba China E-commerce Group revenue reached 122.22 billion yuan, a year-on-year increase of 6%, accounting for about half of the group's revenue. However, behind this growth is Alibaba's sunk cost in instant retail.

In Q1 2026, the adjusted EBITA of Taobao and instant retail business (including Taobao Flash Shopping and Ele.me) decreased by 40% year-on-year. HSBC Research Report estimates that Alibaba's loss in instant retail in the past 12 months reached as high as 87 billion yuan. Despite the massive investment, Alibaba does not intend to stop. In January 2026, an internal meeting of Taobao Flash Shopping clearly proposed that "the primary goal is market share growth, and we will firmly increase investment to achieve absolute market leadership."

The effectiveness of the investment is being realized. According to the Alibaba financial report conference call disclosed on May 13, from January to March 2026, the overall order scale of Taobao Flash Shopping reached 2.7 times the same period last year, and non-food retail reached 3 times the previous year. The company is confident that UE will turn positive before the end of the new fiscal year.

In terms of user scale, QuestMobile data shows that as of March 2026, in the monthly active user scale of instant retail-related applications, Taobao has completely taken the lead over Meituan and JD.com, though with the lowest overall growth rate. From breaking through 10 million daily orders a year ago to reaching a peak of 120 million daily orders today, with monthly transacting users exceeding 300 million, this speed is rare in the internet industry.

Recent personnel and organizational adjustments further demonstrate Alibaba's long-term determination in the instant retail field. On June 2, Hema (Freshippo) was officially placed under the Jiang Fan system, while Alibaba CTO Wu Zeming entered the partnership committee, replacing Shao Xiaofeng who is nearly sixty years old. These two changes hand over Alibaba's near-field retail ace to the ecommerce number one position, while simultaneously elevating the importance of AI technology to the highest decision-making circle of the organization.

Strategic Divergence: Two Paths to Instant Retail Dominance

At the essential level, Alibaba is using near-field delivery to supplement the shortcomings of far-field ecommerce, while Meituan is using food delivery networks to extend to everything retail. These are two strategic paths that lead to the same destination, but the length of the journey depends on their respective accumulation speed in supply chain, AI technology, and fulfillment efficiency.

Alibaba's logic is "using ecommerce profits to make up for instant retail infrastructure." The entire system is centered around "Taobao Flash Shopping" for ecological integration. Hema's incorporation into the ecommerce system allows offline self-operated stores to form a closed loop with instant retail delivery. Hema's total GMV in fiscal year 2026 reached 107 billion yuan, breaking through the 100 billion mark for the first time, with online transactions contributing over 60% and EBITA positive for two consecutive years.

Meituan's logic is "using instant delivery networks to extend to retail." The entire system is centered around reducing delivery and fulfillment costs. The acquisition of Dingdong to obtain supply chain capabilities and the separate listing of commodity sales revenue formally elevate retail to a strategic height. In the first quarter, the revenue of the new business segment increased by 21.3% year-on-year to 27 billion yuan, mainly driven by overseas food delivery platform Keeta and Xiaoxiang Supermarket.

The fundamental difference directly reflects in organizational design. Meituan unified home delivery and in-store services into a fist, commanded by Wang Puzhong; Alibaba is gradually consolidating scattered instant retail assets—Hema, Tmall Supermarket, Taobao Flash Shopping, pharmaceuticals, etc.—under the Chinese E-commerce Business Group under Jiang Fan, attempting to form the depth of "front store back warehouse."

From the perspective of merchant feedback, the differentiation of the two platforms is also evident. Some merchants report that the overall traffic and support for pure food delivery stores on Meituan are still higher than Taobao Flash Shopping, but the order volume gap for convenience stores next door is not that large, indicating that both platforms have their own focus.

Future Outlook: From "Subsidy War" to "Capability War"

The past year's investment of 150 billion yuan in subsidies has resulted in a fundamental structural change in the market landscape, with the instant retail market entering a new cycle of "two-strong competition." The structural change in industry landscape means that neither side can defeat opponents by simple subsidy dimensionality reduction. What will determine the end game will be a comprehensive game of supply chain efficiency, delivery network, technical barriers, and ecological synergy.

Alibaba has provided two clear time nodes: UE turning positive within the next fiscal year, and overall profitability in fiscal year 2029. Alibaba is adjusting instant retail from "money-burning growth" to the "efficiency optimization" stage, with the speed of loss reduction accelerating, and per-order loss already halved. From Meituan's perspective, the Q1 loss reduction of 9.6 billion yuan exceeded almost all institutions' expectations, with the core local commercial loss rate dropping from 15.5% to 3.2%.

The pure food delivery per-order profit and loss have turned positive, and the entire business is switching towards the direction of "retail + technology," with commodity sales becoming the new high-growth engine. Perhaps when looking back next year at this time, 2026 will be regarded as the turning point year for instant retail to move from "barren expansion" to "rational competition."

Both sides are unlikely to launch another round of unscrupulous subsidy offensives. The form of competition will shift from frontal fire with bullets flying everywhere to all-round competition in supply chain depth, technology thickness, and ecological breadth. Alibaba cannot afford to lose because losing instant retail means losing the boundary security of the entire ecommerce empire. Meituan cannot stop because stopping might allow the moat built with more than ten years of effort to burst under the wave of opponents.

The form of war has changed, but the underlying logic determining victory or defeat remains who can create sustained and irreplaceable value for consumers. For brands, the implication is clear: instant retail is not a temporary channel experiment but a strategic imperative that requires dedicated investment, supply chain adaptation, and long-term commitment to building presence on both platforms with differentiated strategies.

Data Credibility Statement:

Data sources: Star Chart Data (618 Shopping Festival 2026 GMV), Meituan Q1 2026 Financial Report, Alibaba Q1 2026 Financial Report, HSBC Research Report, QuestMobile, Ministry of Commerce Research Institute, Jiemian News, CSDN Technology Blog. Statistical period: Q1 2026 and June 2026. Sample coverage: Major Chinese instant retail platforms (Meituan, Alibaba, JD.com, Douyin). Analysis method: Financial report analysis, market share calculation, year-on-year growth comparison.

Frequently Asked Questions

What is the current market size of China's instant retail sector?
The instant retail market reached 781 billion yuan in 2024 and is expected to exceed 1 trillion yuan in 2026, with 618 Festival 2026 sales alone reaching 628 billion yuan.

How much did Meituan lose in Q1 2026?
Meituan reported a net loss of 6.827 billion yuan in Q1 2026, with adjusted net loss of 4.968 billion yuan, showing a significant narrowing trend from previous quarters.

What market share has Alibaba's Taobao Flash Shopping achieved?
Taobao Flash Shopping has captured over 45% market share within one year of launch, with daily orders reaching 120 million at peak and monthly transacting users exceeding 300 million.

When will instant retail platforms achieve profitability?
Alibaba targets UE turning positive in FY2027 and overall profitability in FY2029, while Meituan expects continuous UE improvement in Q2 2026 and beyond.

What are the main competitive strategies in instant retail?
The competition has shifted from subsidy wars to capability wars, focusing on supply chain efficiency, delivery network density, AI technology application, and ecological synergy.