(Yicai) July 7 -- Chinese on-demand services giant Meituan has rolled out large delivery subsidies in response to Taobao Flash Buy's aggressive push into this market.

Meituan launched massive high-value coupons for food delivery and instant delivery orders on July 5, which drove its daily order volume to surpass the 120 million milestone 33 days earlier than last year, according to a report released by the Beijing-based company on the same day.

However, the traffic surge caused the Meituan app to crash at around 6 p.m. in several regions of China. The issues were resolved later in the evening, the firm said on social media.

On July 2, Taobao Flash Buy, the instant retail arm of Chinese e-commerce giant Alibaba Group Holding, announced it would invest CNY50 billion (USD7 billion) in consumer and merchant subsidies over the next 12 months to boost spending and drive growth. Industry sources told Yicai that Taobao Flash Buy's food and retail orders also peaked on July 5.

Based on the annual profits of Meituan and JD.Com, the pair could commit to invest the same amount of Alibaba in instant retail, Zhuang Shuai, founder of Bainilian Consulting, told Yicai.

There are compelling reasons for platforms to engage in this speed competition at this time, including the fact that the peak food delivery season has arrived, mainly because of weather-related factors, such as high temperatures and heavy rainfall, and the summer vacation consumption boom, Zhuang noted.

However, this is not only about competition for a greater share of the instant retail market but also a critical battle for future dominance in the broader 'instant retail + e-commerce + services' consumption ecosystem, he explained.

Subsidies carry different strategic meanings for different platforms, said Chen Liteng, digital lifestyle analyst at 100EC.Com's E-Commerce Research Center. For Meituan and Taobao Flash Shopping, subsidy strategies mainly aim at retaining existing users, while for JD.Com, they are a path to incremental growth, he added.

About the competitive dynamics among the three platforms, Zhuang said that Taobao Flash Shopping has the fastest growth rate, and JD.Com is pursuing differentiated growth, with both companies benefiting from close synergies with their e-commerce operations. Meanwhile, Meituan faces mounting pressure and needs to seek breakthrough strategies.

The instant retail market is a three-way competition between Meituan, JD Daojia, and Taobao Flash Buy, said Guo Tao, a researcher at 100EC.Com's E-commerce Research Center. The core of industry competition has evolved from simple price competition to comprehensive system-level rivalry encompassing supply chain capabilities, instant delivery efficiency, and user experience, he noted.

Editor: Futura Costaglione