Finally figured out the logic of this food delivery war. Alibaba has opened up the previously inaccessible sinking market through tea drink delivery, consequently prying open a moat in the sinking market that was originally protected by Meituan and Pinduoduo. No wonder they are spending so much money on the food delivery war; it’s all about incremental growth.

increase in takeaway order volume

The 50 billion subsidy from Taobao may not necessarily be a loss overall. It’s important to note that Ele.me has long been dominated by Meituan, with its market share being less than 30%. Now, both sides are at a 64 split. Overall, the 50 billion subsidy has gained what previously cost over a hundred billion to capture: the sinking market that was hard to penetrate, the takeaway logistics and market that Meituan continuously encroaches upon, and Alibaba's nearly lifeless local market.

Now three cobblers can outmatch a Zhuge Liang, revitalizing the original assets while also generating incremental business and increasing Taobao's daily active users.