By Ann Cao
Meituan said daily transaction volume on its dominant on-demand delivery reached an all-time high since its inception in 2010, briefly crashing its platform as online purchases surged amid a fresh round of price war among China鈥檚 e-commerce leaders.
Daily orders of food and retail goods for its instant delivery service surpassed 120 million on Saturday, according to the company, with food orders accounting for 100 million or 83 per cent of them.
Meituan鈥檚 delivery services suffered a technical breakdown in certain areas during the day as 鈥渢he number of user orders exceeded the historical peak鈥, triggering temporary protective measures from its servers, Meituan said in a statement on Saturday. The problem was resolved within hours, it added.
The surge in volume came as China鈥檚 major e-commerce players 鈥 Alibaba Group Holding, JD.com and Meituan 鈥 stepped up their bets on instant delivery services in mainland China to compete for consumers. The rivalry is set to spur anaemic spending, which has dwindled amid concerns about China鈥檚 economic outlook.
Alibaba, which owns the South China Morning Post, pushed into the sector through its service known as Taobao Instant Commerce. It earlier this week announced a 50 billion yuan (US$7 billion) one-year subsidy programme. Meituan on Saturday offered discounts that cut the price of a cup of coffee to as low as 2 yuan, media reports showed.
Alibaba and peer JD.com have managed to ramp up business on their platforms. Taobao Instant Commerce had 60 million daily orders as of June 23, barely two months after its launch in late April. Instant delivery of orders on Taobao is performed by Ele.me, Alibaba鈥檚 food delivery arm.
Daily orders on new entrant JD.com鈥檚 platform reached 25 million on June 18, the company said. It launched a food delivery service in February, which aims to bring items to customers鈥 doors typically within an hour.
Meituan, which has long dominated food and instant delivery in mainland China, has managed to maintain its leading position so far. It controls 70 per cent of the food delivery market, according to a report by Chinese tech media outlet Leiphone.com last month, citing the company鈥檚 internal data.
The company reported an 18 per cent increase in revenue to 86.6 billion yuan in the first quarter from a year earlier, while net profit rose 87.3 per cent to 10 billion yuan. Last year, revenue jumped 22 per cent to 337.6 billion yuan while earnings surged 158 per cent to 35.8 billion yuan.