From the “thousand group wars” of group buying to the fierce melee of today’s takeaway market, local services have always been the focus of competition among Internet giants. Giants such as Meituan, Ele.me, JD.com, and Taobao have invested heavily in trying to dominate this field through subsidy wars, technological upgrades, and ecological layout. This article will provide an in-depth analysis of why giants attach so much importance to local services, and explore the attractiveness of local services from various aspects such as market size, user demand, and strategic value.
From the thousand-group war in the field of group buying to today’s fierce takeaway war, the local service market has always been a battlefield for fierce competition among giants. Whether it is Meituan, Ele.me, or e-commerce giants such as JD.com and Taobao, which later joined the battle, they have shown strong interest in and invested heavily in local services. While we are still cheering for 0 yuan milk tea, behind this seemingly lively “big melee” lies the local service ambitions of Internet giants that have been deeply cultivated for ten years. This article will provide an in-depth analysis of the reasons why giants are optimistic about local services from the perspectives of market size, user demand, and giant strategy.
The local service track behind the subsidy war: connecting online and offline super entrances
The hot search for the collapse of Meituan’s system on July 5 is still vivid, and the red envelopes of “0 yuan to eat” and “0 yuan to drink” have made the number of orders instantly surge. This wave of operations is very similar to a replica of Taobao’s flash sale subsidy of 50 billion yuan a month ago, and JD.com, which laid out takeaway as early as June, has also exceeded 25 million daily orders. Looking at Meituan Wang Xing’s declaration of “at any cost”, Jack Ma’s platform for Ele.me, and Liu Qiangdong’s determination to focus on expanding takeaway wine tourism, I returned to the “Thousand Regiments War” in 2011 that burned 12.6 billion.
History is always strikingly similar. The plot of 200 million CCTV advertisements on Nuomi.com, 523 million market fees on Handle.com, and crazy acquisition of 30 opponents by Wowotuan has now been replaced by a digital competition of 120 million daily orders from Meituan, 80 million daily activities from Taobao, and 120,000 riders from JD.com. Even Alibaba’s strategic choice to invest in Meituan and shut down word-of-mouth hints at the special value of the local service track – this is not a simple traffic business, but a super entrance connecting online and offline.
Local services have become a training ground for instant retail: from food delivery to delivery, one step away
The local life service market covers multiple segments such as catering takeaway, leisure and entertainment, and tourism, and its market size is extremely large and showing a continuous growth trend. According to iResearch, the domestic local life market will grow to 35.3 trillion yuan in 2025, with a compound annual growth rate of 12.6%. With the continuous expansion of online catering, online group buying and other scenarios, the online penetration rate of local life services is expected to increase to 30.8% by 2025. Such a huge market size and growth potential is undoubtedly a very attractive piece of cake for giants.
To achieve these three challenges, product managers will only continue to appreciate
Good product managers are very scarce, and product managers who understand users, business, and data are still in demand when they go out of the Internet. On the contrary, if you only do simple communication, inefficient execution, and shallow thinking, I am afraid that you will not be able to go through the torrent of the next 3-5 years.
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Taking the subdivision of catering takeaway as an example, its annual transaction volume reached 1.63 trillion yuan, accounting for 22.6% of the catering industry. The characteristics of high frequency, rigid demand, and stability naturally make it the attribute of becoming a traffic pool. Moreover, takeaway not only brings orders, but also a training ground for instant retail – from food delivery to delivery, one step away. This development trend and market characteristics have attracted giants to enter the game, hoping to occupy a place in this growing market and get a piece of the pie.
Local services are huge traffic entrances: high frequency, rigid demand and convenience
Local services meet the high-frequency rigid needs of users in their daily lives. In terms of catering takeaway, “eating” is the basic need of human life and has the most frequent consumption characteristics. The high frequency of user transactions and the high dependence on the platform mean that the food delivery business is essentially a huge traffic entrance. According to QuestMobile data, as of January 2025, the number of APP usage, usage time, and number of uses per capita on the whole network were 28.7, 171.4 hours, and 2487.9 times, respectively. Among them, the number and duration increased slightly year-on-year, but the number of times decreased rare year-on-year, which means that the traffic has been further differentiated. In this context, the high-frequency rigid demand characteristics of local services make it an important channel for giants to obtain traffic.
At the same time, consumers’ pursuit of convenience is also increasing. Nowadays, consumers are not only satisfied with the next-day or multi-day delivery of traditional e-commerce, but also “half-hour delivery” or even “instant delivery” has become a new expectation. Meituan’s flash sale emphasizes the “30-minute delivery time for offline retail”, as well as the layout of e-commerce giants such as JD.com for instant delivery, which is a positive response to this demand from users. This convenience not only improves the user experience, but also effectively increases user loyalty to the platform.
High frequency band and low frequency: build an ecological closed loop and synergy
On the surface, this takeaway war is a price war to grab users, but in fact it is the ecological offense and defense of the giants. Meituan’s catering orders accounted for 83% of its weaknesses in instant delivery, Taobao’s 13 million non-catering orders showed its e-commerce ecological advantages, and JD.com’s 1.5 million high-quality catering orders highlighted its supply chain expertise. Just like Alibaba took a fancy to Meituan’s 30% order conversion rate, now all platforms are looking for their own “killer features”.
In Meituan’s business model, the “high band and low frequency” strategy is vividly reflected. High-frequency businesses (takeaway, flash sales) are responsible for drainage, and low-frequency businesses (in-store, hospitality) are responsible for monetization, up to various business networks covering local life. Meituan’s wine and tourism business relies on the takeaway business to achieve a cold start, and the first batch of users of the wine tourism that year were translated from takeaway users. This ecological closed-loop construction enables the platform to make full use of user resources, achieve coordinated development between different businesses, and enhance overall competitiveness.
The logic of JD.com’s takeaway is also the same as Meituan’s use of takeaway to drive wine tourism. Although takeaway is difficult to make a profit, it can bring stable traffic. If JD.com can increase the frequency of user opening, it can divert traffic to self-operated categories such as fresh food, 3C, and Ribai, and even empower JD.com’s instant retail business. Through the high-frequency business of takeaway, JD.com can attract more users, increase the time and frequency of users on the platform, and then guide users to consume other low-frequency but high-margin businesses, and build its own ecological closed loop.
Local services become a moat for giant competition: strengthen their own advantages and defend against competitors
The giants are also laying out local services to strengthen their own advantages and resist competitors. For example, JD.com is known for its “fast logistics” in the e-commerce field, and its 211 time-limited delivery (same-day delivery/next-day delivery) was once an industry benchmark. But today, when “half-hour delivery” has become a new expectation for users, Meituan’s instant delivery capabilities pose a direct challenge to JD.com’s “fast logistics” moat. By laying out the takeaway business and supplementing the instant delivery capabilities, JD.com can not only meet the new needs of users, but also defend its advantages in logistics and distribution and consolidate the foundation of the retail empire.
From another perspective, Meituan continues to expand in the field of instant retail, with flash sales entering 3C digital and home appliances, directly targeting the hinterland of JD.com. JD.com has to contain Meituan’s resources and slow down its penetration into JD.com’s core categories by laying out local service businesses such as takeaway. Similarly, e-commerce giants such as Taobao and Alibaba have laid out local services such as takeaway, and in the fierce market competition, by improving their business territory, strengthening user stickiness, resisting the attack of competitors, and enhancing their comprehensive competitiveness in the field of e-commerce and local life services.
User experience and marketing effectiveness improvement: data-driven digital precision marketing
In the process of operation, the local service platform can accumulate a large amount of user data, including multi-dimensional information such as users’ consumption habits, preferences, and geographical location. Taking Meituan as an example, it has a large amount of user consumption data, covering catering, hotel bookings, tourism and other fields. Through in-depth analysis of these data, Meituan can accurately gain insight into user needs, provide users with personalized recommendation services, and improve user experience and consumption conversion rate.
Giants can use this data for precision marketing. For example, based on the user’s historical consumption records, push restaurants and promotions that meet the user’s taste, or recommend hotels and tourism products suitable for their travel needs. Precision marketing not only improves marketing effectiveness and reduces marketing costs, but also enhances user interaction and stickiness with the platform, further improving its own ecosystem.
Future outlook for instant retail: AI empowerment, from red sea fighting to blue ocean innovation
The competition in the local service market is not a short-term subsidy war and traffic competition, but a long-term strategic layout. Giants need to continuously invest resources to optimize service experience, improve operational efficiency, and strengthen technological innovation. Meituan’s 20 billion optimized intelligent performance system to reduce the delivery time to 28 minutes; JD.com piloted drone distribution; Ele.me expands the instant delivery of drugs. These actions reveal the truth of a trillion-dollar market – the incremental blue ocean of fresh food and medicine is far more valuable than the red ocean of catering. The case of JD.com’s “hourly purchase” of 200 brands with sales exceeding one million proves that differentiated service is the real competitiveness.
In the future, the local service market is expected to achieve more diversified and personalized development, and the ecosystem of giants will also be more complete and strong.
From the 100-group war of group buying to today’s takeaway war, the giants are optimistic about local services, not only because of its huge market size and growth potential, but also to meet the needs of users with high frequency, rigid needs and convenience, but also for strategic purposes such as building an ecological closed loop, strengthening their own advantages, resisting competitors, and achieving data-driven precision marketing. In this long-term competition and layout, who can better meet user needs, optimize service experience, and achieve sustainable development will be able to stand out from the competition in the local service market and occupy a leading position.
