As a strategic initiative currently on par with AI within the Alibaba Group, the Taobao Flash Buy business has demonstrated robust growth, surpassing Alibaba Cloud to become the fastest-growing revenue segment for Alibaba in the fourth quarter of last year. According to the company's Q3 FY2026 financial results released on March 19, covering the period from October to December 2025, the on-demand retail business revenue increased by 56% year-over-year to 20.84 billion yuan during that quarter. However, still in a phase of significant investment, the on-demand retail sector continues to impact Alibaba's overall profits and cash flow.
During the earnings conference call, Jiang Fan, CEO of Alibaba's China E-Commerce Business Unit, stated that the company maintains its target for the total gross merchandise volume of the on-demand retail business to exceed one trillion yuan by FY2028. At that scale, he expressed confidence in achieving scalable positive cash flow. "Additionally, we anticipate the on-demand retail business segment will achieve overall profitability in FY2029," Jiang Fan added.
The strategic ambition behind Alibaba's "grand consumption platform" began to unfold notably last April, marked by the upgrade of the Taobao Tian Group's on-demand retail service from "One-Hour Delivery" to "Taobao Flash Buy." Shortly thereafter, Alibaba completed the strategic integration of the Taobao Tian Group, Ele.me, and Fliggy, formally establishing the Alibaba China E-Commerce Business Unit. The objective is to create a unified grand consumption platform by incorporating disparate scenarios such as "long-distance e-commerce," "near-field on-demand retail," and "local lifestyle services" into a single ecosystem.
Alibaba has high expectations for Taobao Flash Buy, viewing it as a key driver to elevate Taobao from an "e-commerce platform" to a "grand consumption platform." The aim is to strengthen the core e-commerce landscape with high-frequency services and rebuild competitive ecosystem barriers.
In the fourth quarter, Alibaba continued to increase its investment in Taobao Flash Buy. The financial report highlighted that, thanks to improvements in fulfillment logistics efficiency, better order structure, and high customer retention rates, the unit economics and average order value for the on-demand retail business showed continuous quarter-over-quarter improvement. Furthermore, synergistic effects between on-demand retail and e-commerce have emerged, contributing to a double-digit year-over-year increase in monthly active consumers on the Taobao app.
Jiang Fan also pointed out that over the past year, Flash Buy has significantly boosted the platform's overall performance. The annual active buyer count for the broader e-commerce sector, including Flash Buy, grew by 150 million, while the annual active buyer count for physical goods e-commerce increased by 100 million. The growth in annual active buyers for Taobao's physical goods e-commerce surpassed the total growth achieved over the previous three years combined.