Free drinks fuel delivery wars between Alibaba and Meituan

Shanghai delivery rider Xie Yu was halfway through his shift on Thursday when he realised he would end up with nearly 100 orders for the whole day, double his average number.

The reason for the huge spike? Chinese consumers were lapping up offers of free drinks and discounted meals from food delivery giants Alibaba Group Holding and Meituan.

“This is one of the craziest days I’ve experienced since I became a rider,” said Xie, 39, who has worked for both Alibaba’s Ele.me and Meituan over the past six years.

In recent months, he has seen an increasing number of orders from Alibaba’s flagship Taobao platform, whereas before, six out of 10 came from Meituan.

The past week has seen an escalation in the “free drinks war” between the two giants, an extension of their broader price war designed to draw more consumers to their respective platforms.

A week ago, Alibaba began offering daily vouchers worth 18.8 yuan (US$2.60), but then upgraded the campaign this week by offering 1 million free milk teas each day from Thursday through Sunday.