Alibaba spent ¥50B to buy back food delivery — then capped the bet

Alibaba rebuilt its food-delivery front in April 2025: Taobao's 'hourly delivery' was upgraded into Taobao Shangou, given a first-tier slot on the Taobao homepage, with Ele.me folded in to support it — and a subsidy program of over ¥10 billion to open the campaign. In July the bet was raised: ¥50 billion of subsidies over twelve months, across stores, products and delivery. Jiang Fan, head of Alibaba's China e-commerce, set the prize at ¥1 trillion of GMV within three years.

The results published November 25, 2025 showed the price. Group revenue rose 5% to ¥247.795 billion, but net income fell 53% to ¥20.612 billion and operating profit fell 85% to ¥5.365 billion. Sales and marketing expense rose 105% to ¥66.5 billion — from 13.7% of revenue to 26.8% — while operating cash flow dropped 68% to ¥10.1 billion and the cash pile shrank by ¥54.5 billion over two quarters. Instant retail revenue grew 60% to ¥22.906 billion; Dolphin Research estimated Shangou itself lost about ¥36 billion in the quarter, with the China e-commerce segment's profit down nearly 77%.

What the money bought: Taobao's daily active users rose 20% in August on Shangou's pull, and new instant-retail users placed over 100 million e-commerce orders during Double 11 — though CITIC Securities estimated their incremental GMV at only about 1% of e-commerce GMV. CFO Xu Hong called the quarter the peak of Shangou investment and said next-quarter spending would shrink significantly; by October the per-order loss had already halved against July-August. Fitch judged the subsidy war unsustainable and topping out in Q3 2025. The blitz was real — and so was the pullback.