Taobao Now, a rapid delivery service from Alibaba, has ignited a significant consumer spending surge with its ambitious 50-billion-yuan subsidy program. Launched on July 2nd, this year-long initiative aims to directly benefit both consumers and merchants, and early data suggests it’s already making waves.
Since the subsidies went live, restaurant chains and small-to-medium-sized businesses have reported impressive growth spurts, with transactions increasing by 170% and 140% respectively on a month-over-month basis. The consumer-focused perks, including substantial red envelopes and special pricing, have directly boosted orders for a wide array of food and beverage categories. Think a more than 150% jump in orders for coffee, drinks, desserts, snacks, and fast casual dining. The late afternoon and late-night dining crowd has also responded enthusiastically, seeing order volume grow by over 170%.
The allure of these generous discounts, including a compelling “one-price-fits-all” offering backed by official subsidies, is clearly resonating, transforming Taobao Now into a go-to platform for younger consumers looking to satisfy their five-a-day cravings. The platform’s traditional “three meals” categories like baked goods, congee and noodles, and Western fast food have all doubled their order volumes. Meanwhile, popular afternoon pick-me-ups like coffee, beverages, and desserts have seen orders more than triple, with snacks also experiencing over a 150% increase. This has particularly fueled growth in the afternoon tea and late-night supper segments, which have surged by 170% and 190% respectively.
The platform’s aggressive investment is translating into a robust uptick in merchant orders, significantly propelling urban service consumption. Over 40 cities have witnessed their highest transaction volumes since the program’s inception, with the subsidy program driving over a 100% increase in transaction volume for tier-one cities like Hangzhou, Wuhan, Changsha, and Chengdu compared to the previous week. In cities such as Guangzhou, Guiyang, Taiyuan, Nanning, Hohhot, and Foshan, Taobao Now’s impact on local service consumption has been even more pronounced, with order growth in some areas exceeding a remarkable 300%.
Beyond the culinary delights, Taobao Now’s retail segment also experienced a significant uplift on its launch day. A total of 589 retail brands saw their order volumes more than double compared to the full launch of the Taobao Now service on May 2nd. Categories like ready-to-eat meals and alcoholic beverages saw their order volumes double. Major brands demonstrated impressive growth, with Nongfu Spring orders jumping 504%, Lenovo 467%, Philips 350%, and Zhao Yiming 420%. Brands such as Snow, Haoxianglai, and LingShiHenMang even saw their order volumes soar by more than tenfold.
Looking ahead, Taobao Now is committed to injecting a total of 50 billion yuan into consumer and merchant subsidies over the next 12 months. Through a combination of substantial red envelopes, “buy one, get one free” cards, and officially subsidized fixed-price items, the platform aims to deliver exceptional value and convenience to consumers, thereby reigniting spending vitality. Simultaneously, it’s implementing measures such as store and product subsidies, delivery fee reductions, and commission waivers to foster merchant growth. This strategic investment, coupled with technological and business model innovation, is designed to cultivate a highly efficient and collaborative consumer ecosystem. By leveraging its vast user traffic, Taobao Now is poised to invigorate both offline commercial activities and the service industry, forging a novel platform model that seamlessly integrates e-commerce and services. In its first two months since launching in conjunction with Ele.me, Taobao Now has already surpassed 60 million daily orders.
Industry analysts are hailing the 50-billion-yuan investment as a pivotal opportunity for Chinese catering and retail merchants to embark on a new phase of growth. By injecting capital, Taobao Now is helping businesses return to a trajectory of healthy market competition and achieve genuine sales growth. Concurrently, it is lowering costs for consumers and innovating consumption scenarios, representing a potent strategy for unlocking consumer potential and offering a compelling model for countering market stagnation.
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