While Alibaba, JD.com, and Meituan have been fiercely battling in the instant retail arena over the past year, and nearly all tech companies have been going all-in on AI, PDD Holdings Inc, once dubbed a "dark horse," has remained remarkably quiet. Compared to its aggressive expansion in recent years with Duoduo Maicai and TEMU, PDD has neither heavily invested in AI nor pushed into instant retail.
However, beneath the calm surface, undercurrents are always at work. Reports suggest that PDD is currently conducting a low-key internal test of a new service called "Billion-Dollar Supermarket" within its app, featuring product categories ranging from fruits and vegetables to nuts, snacks, dairy beverages, and maternal and infant supplies.
Leveraging its well-established "Billion-Dollar Subsidies" system, the "Billion-Dollar Supermarket" initiative focuses on limited-time, limited-quantity coupons and low-price subsidies as its core strategy. It is currently only accessible to a randomly selected group of users for trial. Information indicates that the "Billion-Dollar Supermarket" does not have a separate secondary entry point but is instead embedded within the main Billion-Dollar Subsidies channel on PDD's homepage.
Users entering the Billion-Dollar Subsidies channel would find the "Billion-Dollar Supermarket" prominently displayed, reportedly issuing two random discount coupons daily during the promotional period. However, it was also revealed that the "Billion-Dollar Supermarket" service underwent an activity upgrade as of 24:00 on January 11th, leading to a temporary closure of its access point, with the timing of its reopening remaining uncertain.
Notably, several users have indicated on social platforms that PDD actually conducted a brief internal test of the "Billion-Dollar Supermarket" business back in 2025 as well. Regarding the specific details of the "Billion-Dollar Supermarket" initiative, PDD has not yet issued an official response.
Testing the "Billion-Dollar Supermarket" can be viewed as a significant exploration for PDD to replicate its successful "subsidy model," proven in low-frequency categories like 3C products and cosmetics, into the high-frequency supermarket shopping scenario. Through a supermarket business, PDD could effectively enhance user activity and retention rates, achieving comprehensive coverage of user demand across all scenarios.
"Amid the intense competition in instant retail, PDD's core business in fast-moving consumer goods and the lower-tier market has indeed been significantly impacted," a retail e-commerce industry expert pointed out, suggesting that by launching the "Billion-Dollar Supermarket," PDD aims to strengthen its advantage in FMCG categories and reinforce user perception. This move could help it resist competition from Taobao Quick Purchase, Meituan, and JD.com in the instant retail space while also preparing for potential expansion into offline physical supermarkets for instant retail services.
In fact, since last year, there have been ongoing external rumors that PDD is also making arrangements for instant retail. Last June, it was also understood that Duoduo Maicai planned to launch an instant delivery service in specific regions. However, following the retreat of Meituan Youxuan, Duoduo Maicai also halted its experiments with instant retail, shifting its focus to capturing the market void left by Meituan Youxuan.
More recently, further reports have emerged claiming that PDD is preparing to enter the instant retail market, allegedly establishing urban front-end warehouses in cities like Beijing, Shanghai, Guangzhou, and Shenzhen. There is said to be a fifty percent probability of a launch in the first quarter, with the latest deployment expected no later than the third quarter. This information, however, has not been officially confirmed.
Regardless of whether PDD ultimately enters the fiercely competitive instant retail arena, in today's e-commerce industry characterized by competition for existing users and increasingly high customer acquisition costs, the supermarket category, as a high-frequency, essential "traffic gateway," is clearly a business segment that PDD must prioritize.
However, looking across the landscape, the supermarket retail track within the e-commerce industry is already crowded with giants, and a major "efficiency war" is currently unfolding within the broader instant retail battlefield. Most recently, Alibaba fired the first shot in the 2026 instant retail competition, publicly announcing its firm commitment to increasing investment in Taobao Quick Purchase with the goal of securing "absolute leadership in the instant retail market."
Under this objective, Tmall Supermarket and Freshippo undoubtedly bear significant responsibilities. It has been learned that Tmall Supermarket is accelerating its upgrade focused on instant retail, partnering with Cainiao to continuously enhance Taobao Quick Purchase services. By the end of January, Cainiao is expected to help Tmall Supermarket achieve comprehensive service speed upgrades for Taobao Quick Purchase in 31 cities nationwide, with delivery times as fast as 4 hours, facilitated by opening and expanding Tmall Supermarket quick purchase warehouses in multiple cities.
Furthermore, Freshippo's development has been rapid. On New Year's Day 2026, Freshippo CEO Yan Xiaolei disclosed in an internal letter that the company's overall revenue growth in 2025 exceeded 40% year-on-year, with its Freshippo stores and Chaohe Suan NB dual formats serving over 100 million consumers. In 2025, Freshippo stores entered 40 new cities, and Chaohe Suan NB opened more than 200 new stores. To date, Freshippo operates nearly 500 Freshippo stores and 400 Chaohe Suan NB stores nationwide.
Simultaneously, Freshippo is becoming a crucial piece of the Taobao Quick Purchase ecosystem. Data provided by Taobao Quick Purchase indicates that after integrating with the service, Freshippo's daily order volume increased by over 70% year-on-year. Catalyzed by instant retail, the major trend of "online-offline integration + supply chain efficiency improvement" is becoming increasingly evident.
Meituan, Taobao Quick Purchase's primary competitor, also demonstrates strong performance in the supermarket sector. Currently, Xiaoxiang Supermarket is Meituan's key focus for supermarket retail. Meituan CEO Wang Xing explicitly mentioned during the Q2 earnings call that, aside from food delivery, Xiaoxiang Supermarket is the highest-frequency service.
Late last year, Xiaoxiang Supermarket also officially opened its first offline store, filling a critical gap in Meituan's offline layout and forming a three-tier structure for supermarket retail comprising "Xiaoxiang Supermarket front-end warehouses + Xiaoxiang offline stores + Happy Monkey." JD.com Supermarket is also currently gaining strong momentum, having released a new strategy last September aiming to increase its user base from 300 million to 500 million within three years.
Facing these established giants, it is evidently not an easy task for PDD to break into the supermarket track. Currently, the "Billion-Dollar Supermarket" has not secured an independent primary entry point on the app's homepage; it remains embedded within the Billion-Dollar Subsidies channel, making access relatively deep and potentially hindering the formation of a distinct "supermarket mindset" among users.
A deeper challenge lies in the fact that the competitive focus in the supermarket sector has shifted from mere traffic subsidies to a comprehensive contest involving supply chain capabilities, fulfillment efficiency, and service quality. JD.com boasts a mature warehousing and distribution network, Alibaba has its instant delivery system, and Freshippo and Meituan possess extensive offline coverage. In contrast, PDD's "Billion-Dollar Supermarket" currently faces tests regarding product assortment and fulfillment speed.
The key to PDD potentially gaining a solid foothold in the supermarket retail market will be its ability to address shortcomings in quality and delivery speed without sacrificing its core advantage of low prices. PDD's greatest assets lie in its extreme cost-control capabilities and its massive user base in the lower-tier markets.
Furthermore, PDD possesses a battle-hardened "iron army" tempered in the community group-buying wars. This team previously led Duoduo Maicai to surpass Meituan Youxuan in 2022 and secure the top industry position. The supply chain capabilities honed through community group-buying will likely form the foundation for PDD's foray into supermarket retail.
The development trajectory of supermarket retail is already clear: it is no longer a one-dimensional game about who is cheaper, but rather a new revolution reshaping national consumption habits. Whether PDD will ultimately introduce new variables into the industry remains full of unknowns.
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