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<Research>UBS: Alibaba's Rollout of Amap Ranking First Step into In-Store Field, Stretching Competition with Meituan Beyond Quick Commerce
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UBS report covered BABA-W (09988.HK), of which subsidiary Amap officially launched the “Amap Street-food-hopping Ranking” feature yesterday. Unlike traditional user reviews, Amap adopts AI-powered ranking based on real user behavior, underscoring that this ranking is not designed for monetization. To entice user participation, Amap will invest RMB1 billion in platform subsidies to support travel and in-store consumption. The broker expected these measures to bring an additional 10 million daily user traffic to local merchants. Meanwhile, MEITUAN-W (03690.HK) announced plans to integrate its self-developed LLM into Dianping, upgrading the review filtering mechanism, and will launch “Agentic AI” service for C-end users within a week. In terms of in-store, Alibaba's ambition for local services is evident. After magnifying investments in food delivery and quick commerce, UBS believed Amap's upgrade is its first step into in-store, contrasting with Dianping's local search-focused model. Based on QuestMobile data, Amap has 170 million DAUs, processing over 120 million searches and 13 million local merchant navigations daily, while Dianping's DAUs are 33 million (about one-fifth of Amap), though Meituan still has advantages in user mindset, accumulated reviews, and merchant relationships in local services. UBS believed Amap's upgrade reflects the dynamic competitive landscape of local services, extending from quick commerce to in-store business (Meituan's most profitable segment). Looking ahead to 4Q, the focus was projected to shift from food delivery to non-food quick commerce (summer peak season and post-Double 11) and in-store business (possibly leveraging Golden Week traffic). The e-commerce segment remains relatively volatile. In terms of stocks, the broker was more optimistic about Alibaba, citing reasons such as peak investment in quick commerce, strong performance of the core TTG, and continued play out of AI thesis. If executed properly, Alibaba's long-term value was estimated to be released. JD-SW (09618.HK) currently has a 2025E 7x P/E, with low valuation and attractive short-term risk-reward due to potentially lower-than-expected food delivery investment and stable core e-commerce, but the street likely awaits signs of core earnings stabilization. AASTOCKS Financial News Website: www.aastocks.com |
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