Alibaba's amap is launching an AI-powered “Street Stars” feature

Alibaba’s Amap is moving beyond basic navigation and into Meituan’s territory. It now ranks restaurants, hotels, and tourist spots in the app to help people choose where to eat, stay, and visit.

The change shows the rivalry between two of China’s biggest internet companies is intensifying as they compete for everyday spending.

Alibaba and Meituan are competing for the “instant retail” market, one-hour deliveries packed with coupons and flash deals.

Announced Wednesday, Amap’s new feature called “Street Stars” will rely on AI to rank places for the app’s 170 million daily users.

To kick off the service, the app is putting up 1 billion yuan ($140.43 million) in incentives, letting people claim coupons for ride-hailing or in-store offers. The rollout will start in 300 cities and cover 1.6 million listings for local shops and services.

For years, Chinese diners and travelers have turned to apps such as Meituan’s Dazhong Dianping to check reviews, find places to eat and make reservations.

Meituan said on its official WeChat account on Wednesday that it is refreshing Dianping’s take-away offering from top-rated eateries and will hand out 25 million consumption coupons.

On a post-earnings call, Reuters reports, Alibaba Group CEO Eddie Wu described Amap’s AI revamp and said it is positioned as a “new gateway for future lifestyle services,” tied to Alibaba’s plan for a “comprehensive consumption platform.” The regulatory reaction is still unclear.

Officials have already called in top e-commerce and delivery platforms for several meetings, and the continuing price war clashes with guidance that warns against a race to the bottom.

China’s online giants risk profits in price war for market share

As Cryptopolitan noted before, the struggle among China’s online giants to capture instant retail is weighing in on profits in the short to medium term and add to deflationary pressure in the world’s second-largest economy.

Players including Alibaba, Meituan and JD.com  have flooded users with promotions to seize share in the one-hour segment, burning cash, narrowing margins and drawing investor queries about strategy.

The spending spree has eaten into margins, and investors want clarity on how the companies will balance pursuit of market share with returns.

Regulators have taken note as companies step up price cuts in a period marked by soft real-estate values and fragile employment. As firms posted results for the quarter ended June 30, competition dominated analyst discussions and management remarks.

JD.com CEO Sandy Xu cautioned about unsustainable “excessive competition.” Meituan CEO Wang Xing referred to a “new phase of competition,” and PDD Holdings co-CEO Zhao Jiazhen said rivalry “has intensified further” during the quarter.

Earlier this year, JD.com launched a rival food-delivery app after Meituan widened its product range. Alibababa’s Ele.me, also boosted its spending.

All three groups have pledged billions of dollars to expand their footprint. Nomura analysts estimate the sector burned more than $4 billion in cash in the second quarter alone.

Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.