(Yicai) July 7 -- Meituan said daily transactions on its platform hit a record high over the weekend, briefly crashing its app, after the Chinese on-demand services giant rolled out big subsidies in response to an aggressive push into this market by Alibaba Group Holdings’ instant retail arm.

Daily transactions surpassed 120 million on July 5, according to a report released by Beijing-based Meituan on the same day. The peak arrived 33 days earlier than last year, it added. The surge in orders triggered server traffic control measures at around 6 p.m., leading to service disruptions in some regions. The issue was resolved later that evening, Meituan said on social media.

Meituan introduced big subsidies for food and instant delivery orders after Taobao Flash Buy, previously known as Taobao Instant Commerce, announced a CNY50 billion (USD7 billion) one-year subsidy program for buyers and sellers on July 2. Taobao Flash Buy's food and retail orders also reached record highs on July 5, industry sources told Yicai.

Instant retail refers to a hybrid of e-commerce and local delivery that allows online shoppers to receive products -- food, groceries, consumer goods, and so forth -- within an hour, and often within just a few minutes.

The instant retail market is a three-way competition between Meituan, JD.Com’s JD Daojia, and Taobao Flash Buy, said Guo Tao 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.

Based on the annual profits of Meituan and JD.Com, the pair are likely to offer subsidies comparable to those of Alibaba, according to Zhuang Shuai, founder of Bailian Consulting.

With the race now underway, each platform has compelling reasons to compete, Zhuang told Yicai. Now is the peak season for food deliveries, consumers are more willing to spend, and their habits around instant purchases have already taken shape, he noted.

Summer factors such as heatwaves, heavy rain, and the school holidays further fuel demand, making this the busiest time of year for instant retail, Zhuang said.

But this is not only about competition for a greater share of the instant retail market, Zhuang pointed out. It is also a critical battle for future dominance in the broader 'instant retail + e-commerce + services' consumption ecosystem, he said.

Subsidies have a different strategic meaning for each platform, said Chen Liteng, digital lifestyle analyst at 100EC.Com's e-commerce research center. For Meituan and Taobao Flash Buy, subsidies are mainly aimed at retaining existing users, while for JD.Com they are a path to incremental growth, he added.

Commenting on the competitive dynamics among the three players, Zhuang said that Taobao Flash Buy 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 a breakthrough, he noted.

Editor: Futura Costaglione