In 2025, online retail centers around two major themes: anti-involution and instant retail.

Theme One: Anti-Involution, primarily affecting small and medium-sized enterprises, triggered by two key points. First, in mid-2024, the government prohibited platforms from passing on marketing costs to merchants. In May 2024, the State Administration for Market Regulation issued the "Interim Provisions on Anti-Unfair Competition in E-commerce," explicitly forbidding platform operators from charging unreasonable fees in the guise of service fees or other costs. Second, comprehensive governance against 'involutionary' competition commenced in 2025, with the Politburo meeting emphasizing stricter regulations to curb low-price disorder and protect quality businesses. This year, all e-commerce platforms are promoting benefit-enhancing policies; small and medium enterprises are experiencing reduced burdens (e.g., 拼多多 reducing commission fees and 抖音 lowering fees for weaker categories), while top merchants with strong capabilities have stable profits and fewer incentives.

In terms of platform performance, monetization rates vary significantly: 拼多多 sees a noticeable decline in monetization, while 淘天 and 京東's commercialization levels continue to grow. 拼多多, focused on small and medium-sized merchants and low-margin categories, suffers the most with a decrease in Traffic Rate (TR), while 抖音 maintains steady TR levels (advertising TR increases but commission TR decreases, netting off). 淘天 and 京東 report increases in both advertising and commission TRs, while 快手 amplifies its commission monetization, with TR expected to improve gradually in the second half of the year.

Policy extensions effective from October 1 include changes in deductibility of streaming costs, which will now be limited to 15% of annual revenue, aiming to curb unfair competition and discourage merchants from using excessive financial tactics for short-term sales. This shift encourages a focus on building brands that attract repeat customers instead of one-off sales.

From the merchants’ perspective, streaming costs exceeding 15% are mostly found in high-margin categories on live commerce platforms, where new brands often rely more on spending to capture one-time traffic. The impact will be significant for these merchants as platforms pivot to structural adjustments to mitigate risks. Supposedly limited effects of streaming tax are expected on 抖音 and 快手's commercialization.

Theme Two: Instant Retail Instant retail is moving closer to traditional offline retail and requires longer-term investment.

- 淘寶閃購: Launched in May, peak daily orders exceeded 120 million in August. However, losses are projected to surpass 100 billion in Q2 and 350-400 billion in Q3. Observations will focus on developing efficient operational capabilities and optimizing user experience. - 京東外賣: Aimed at driving e-commerce growth, it faces similar loss projections. The firm aims to build user loyalty and operational capacity. - 美團: With a strong base in instant delivery, it expects around 70 million daily orders in 2024 and up to 150 million in 2025.

Distinct operational types exist between long-distance e-commerce and instant retail. Long-distance e-commerce focuses on matching supply with demand, while instant retail emphasizes fulfillment rates.

Forecast for Double 11: E-commerce platform investments for Double 11 are expected to decrease significantly, with ongoing divergence in GMV performance.

Overview: This year, all platforms are scaling back on investment, with GMV shares likely to change similarly to last year: 淘天's share may slightly decline, while 京東, 拼多多, and 快手 could see continued growth in their shares.

With a shift of focus towards instant retail and a notable reduction in overall subsidies from major platforms, merchants face changes in subsidy leanings with promotional offerings shifting towards AI tool empowerment.

Platform rhythm: With promotional cycles extending, 淘寶閃購 and 小紅書 will participate in this year’s Double 11 for the first time. On the consumer side, merchants are burdened with lower subsidies, leading to the rise of direct discounts over cross-store promotions.

From a business perspective, traditional giants are diminishing merchant support while ramping up AI capabilities, focusing less on sheer quantity of promotions and more on sustainable AI-powered enhancements. There is a marked reduction in financial backing for promotional activities, rallying resources towards live-stream settings.

Overall, the fierce competition landscape must adapt to new policies that prioritize long-term brand building over short-term sales spikes, significantly affecting resource allocation across platforms.