Beyond Food Delivery War, Alibaba’s Amap Takes Aim at Meituan’s Core Local Services

TradingKey - Not content with its “victory” in the food delivery war, Chinese e-commerce giant Alibaba (BABA.US, 9988.HK) has turned its attention to the local services market, with its Amap launching a major new product — the “Street Stars” — directly challenging Meituan’s Dianping. The initial market reaction saw Alibaba’s Hong Kong shares open 4% higher on Wednesday, while Meituan (3690.HK) dropped over 1%.

On September 10, coinciding with Alibaba’s 26th anniversary, Amap announced the launch of the “Street Stars”, branded as the “real ranking voted by 1 billion people on foot.” The list covers a wide range of services including restaurants, hotels, and attractions, offering comprehensive ratings and rankings for merchants.

Reportedly, this is the world’s first lifestyle service ranking built on real navigation and travel behavior data, enhanced by AI technology, aiming to establish a new offline service credibility system. 

Currently, the list includes 1.6 million offline service providers across over 300 cities in China, including 870,000 restaurants, 230,000 hotels, and around 50,000 scenic spots.

The market widely views this move as a direct challenge to Dianping, Meituan’s core review and discovery platform, marking an expansion of the rivalry between the two internet giants from the “delivery war” to the “in-store battle.”

Before the official launch, insiders had already revealed that Alibaba was preparing a major restructuring of its local services business, including reviving Koubei and expanding Amap’s self-operated group-buying services. The U.S. market reacted early, with Alibaba’s U.S.-listed shares rising 4.18% on Tuesday.

In the recent delivery wars, Alibaba leveraged its Ele.me ecosystem to achieve a dramatic market share comeback with relatively limited profit erosion. At one point, its market share surpassed Meituan’s, while Meituan’s Q2 adjusted net profit plunged 89% year-on-year.

Year-to-date, Alibaba’s Hong Kong stock has surged over 76%, while Meituan has dropped over 32%. This stark divergence reflects capital markets’ differing views on the two companies’ competitive trajectories.

Dianping is a core pillar of Meituan’s business, but for years, users have complained that merchant ratings on the platform are losing credibility.

The key innovation of the Street Stars is its use of behavioral data — a unique advantage over traditional ranking systems. 

Li Gang, product manager for the list, said that some high-rated stores may be artificially inflated, but foot traffic doesn’t lie. By leveraging massive real-world visitation data, Amap aims to build the most authentic scoring system, reshaping trust in local service quality.

Meituan is not standing idle. On the same day, it announced renewed efforts in delivery quality and review authenticity. Starting September 10, Dianping relaunched its “Quality Takeout” service, using an in-house developed large AI model to analyze vast volumes of real user reviews and filter out fake or misleading feedback. This AI-powered approach could soon extend to other local services.

Compared to the low-margin delivery business, local services — including restaurant vouchers and hotel discounts — offer higher profitability, which is why tech giants like ByteDance are also entering the space.

On September 10, Douyin Local Services launched the “Support for Neighborhood Shops” initiative, offering traffic incentives, influencer visits, in-store materials, and product subsidies for merchants with average spending under 100 RMB. However, Douyin has not yet confirmed plans to launch its own food delivery service.

On Wednesday, Alibaba’s Hong Kong shares closed up 0.63%, while Meituan rose 2.06%.