(Yicai) July 2 -- Taobao Flash Buy, the instant retail arm under Chinese e-commerce giant Alibaba Group Holding, will pour CNY50 billion (USD7 billion) into consumer and merchant subsidies over the next 12 months to boost spending and drive growth.

The platform will roll out store subsidies, product subsidies, delivery subsidies and reduced or waived commission fees to ensure that merchants maintain their profit margins and can grow their business, Taobao Flash Buy said today.

Meanwhile, customers will benefit from the distribution of red envelopes, which are a form of cash gift, free order cards and platform discounts on fixed-price products.

Taobao Flash Buy's subsidies will guarantee that vendors make reasonable profits and boost their operational vitality, analysts said. It is a proactive response to regulators’ clamp down on unhealthy competition.

Since Taobao Flash Buy was launched on May 23, it has quickly attracted a number of restaurant chains and retailers looking for new customers and sales channels. During the major 618 online shopping festival last month, many companies logged record sales on the platform. Apple and Xiaomi both posted a 50 percent jump in orders from last year’s shopping bonanza, spurred in part by sales on the new platform.

By the end of its first month of operations, Taobao Flash Buy was handling more than 60 million food orders a day in collaboration with its food delivery partner Ele.me. Retail orders jumped 179 percent over the period and 96 percent of orders were delivered on time.

Hangzhou-based Alibaba has integrated Ele.me and its online travel service Fliggy into the domestic e-commerce division, according to an internal memo. This marks a strategic shift toward building a one-stop platform for takeouts, travel and shopping.

Editor: Kim Taylor