By Casey Hall
SHANGHAI (Reuters) – Alibaba’s mapping app Amap is moving away from its traditional focus on navigation and encroaching into rival Meituan’s local-lifestyle territory by launching its own ranking of restaurants, hotels and tourist destinations.
Alibaba and Meituan are among the prominent tech companies in China locked in a bitter battle for market share in “instant retail”, flooding consumers with discounts and coupons in the booming one-hour delivery segment.
This has also drawn increased scrutiny from regulators who are worried about a downward price spiral in China, where weak property prices and poor job stability have contributed to a persistent consumer malaise, pressuring companies into aggressive pricing and subsidies to get people spending.
Amap’s new function, announced Wednesday, will be known as “Street Stars” and will use artificial intelligence algorithms to rank destinations for Amap’s 170 million daily active users.
The app is offering 1 billion yuan ($140.43 million) in subsidies for users to get coupons for ride-hailing or in-store services as part of the new service’s launch, which will initially cover 300 cities and 1.6 million listings for local businesses.
Chinese consumers have long relied on apps such as Meituan’s Dazhong Dianping to research restaurant recommendations, make bookings and more.
Meituan announced on its official WeChat account on Wednesday that, as part of a revamp of Dianping’s take-away service from highly rated restaurants, it would offer 25 million consumption coupons.
On a recent post-earnings call with analysts, Alibaba Group CEO Eddie Wu pointed to the AI transformation of Amap and its positioning to become a “new gateway for future lifestyle services” as part of Alibaba’s plan to create what it calls a “comprehensive consumption platform”.
Questions remain about the role Chinese regulators might have in those plans. Authorities have already summoned China’s top e-commerce and food delivery firms for multiple meetings, and a continuing price war contravenes official government messaging warning against a race-to-the-bottom competition.
($1 = 7.1209 Chinese yuan renminbi)
(Reporting by Casey Hall; Editing by Muralikumar Anantharaman)
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