Amazon Joins Hands With FedEx Amid UPS Pullback As Chinese Giants Race Into Instant Retail

One of the fastest growing consumer sectors, E-commerce, has recently seen some major shake-ups. From the US-China tariff trade war creating instability to DoorDash’s $5 billion acquisition of Deliveroo & SevenRooms—the retail space is seeing more drama with strategic partnerships and rising competition between bigwigs.

So, Amazon and FedEx have decided to renew their deal to provide residential delivery services with UPS, Amazon's long-time service partner, pulling back, cutting jobs, and shipping less for the retail giant.

On the other hand, Chinese retail giants Alibaba and JD.com are stepping up their efforts to gain a stronger grip quick commerce market. By offering subsidized "instant retail" orders in less than 60 minutes, the scene is heating up.

Here’s all you need to know!  

Amazon Strikes Deal With FedEx Amid UPS Pullback

In a bold new move, Amazon has signed a multi-year deal with FedEx to handle residential deliveries for select large packages. This will mark the first time these two technology giants have worked together since 2019.


Reports say the deal was concluded in February and gave Amazon "cost favorability" over UPS. This means that the online shopping giant could save a lot of money on shipping costs with this new deal. An internal Amazon document even referred to FedEx as the “primary solution” to address delivery capacity constraints.

Amazon clarified that this deal is not a replacement for UPS, with FedEx and UPS battling over market share over the past few years, but rather an addition to its existing network of third-party delivery partners. FedEx will work alongside UPS, USPS, and Amazon’s own logistics network to serve customers in the U.S.

“FedEx joins our other third-party partners like UPS and the USPS, that work alongside our own last mile delivery network to help us balance capacity to best serve customers,” said Amazon spokesman Steve Kelly.

This renewed deal follows UPS’s announcement earlier this year that it would cut Amazon shipments by over 50% by the end of 2026. UPS also revealed plans to slash 20,000 jobs and shut 73 facilities, citing a need to shift focus from high-volume, low-margin business to more profitable deliveries.

FedEx, which saw years of tough competition with UPS, celebrated the deal publicly, calling it a “mutually beneficial” agreement. FedEx shares surged 7% on the day of the announcement—outpacing gains across major Wall Street benchmarks.

Interestingly, Amazon’s internal “Extra Large” delivery team—which handles bulky items like TVs and furniture—is expected to rely heavily on FedEx for managing capacity risks in the second half of 2025. While Amazon called this reference “premature,” it’s clear that large package logistics is becoming a focus for Amazon's evolving supply chain.

However, what’s evolving even quicker is the quick commerce market in China. Take a look! 

Why Are Alibaba And JD.com Clashing Over Instant Retail?

The E-commerce race in China is intensifying—but this time, it’s not about who has more consumers or product variety. It’s about who can deliver the fastest!

Chinese retail companies Alibaba and JD.com are putting more effort into instant retail, referring to delivery in 30 to 60 minutes. In a market that is already price-conscious, this new turf war focuses on offering quicker deliveries than rivals.

JD.com started delivering food via "JD Takeaway," while Alibaba has simplified online shopping on its domestic e-commerce app Taobao. Moreover, Alibaba's Ele.me, China's second-largest food delivery player behind Meituan, also gives users access to quick food deliveries. 

However, these competing sites have introduced new categories, such as fast food, drinks, electronics, pet food, and even clothes.

To win customers’ attention, both JD.com and Alibaba have announced subsidies: JD Takeaway is giving discounts of up to 20 yuan ($2.77) daily for deliveries from popular restaurants such as McDonald's, Haidilao, and Burger King. Alibaba’s Taobao consumers are eligible to receive a discount of 11 yuan on a bill of at least 15 yuan.

A user in Tianjin reported buying a latte for just 5.9 yuan on JD Takeaway, and an even cheaper one for 3.9 yuan via Taobao. With plans to subsidize orders worth 10 billion yuan (around $1.38 billion) each, it's clear that these retail giants are footing the bill to capture a larger market share.

Another market leader, Meituan, is also expanding aggressively out of its food delivery services, pushing into the same-day delivery of non-food items—including the new Apple iPhone—directly challenging Alibaba and JD.com.

Despite the short-term cost of these campaigns, analysts say the Chinese giants are well-positioned to sustain them as they hold vast cash reserves: Alibaba (400 billion yuan), JD.com (144 billion), and Meituan (110 billion), according to Morningstar.  

What Do These Moves Mean For The Future Of E-Commerce?

Amazon’s new deal with FedEx signals a broader shift in its delivery strategy. As UPS distances itself from high-volume Amazon shipments, FedEx has stepped in to fill the gap, giving Amazon a dominant position across e-commerce and retail logistics.

For FedEx, this partnership is more than just a business win but a comeback into Amazon’s orbit after years of competition from UPS.

Meanwhile, in China, the instant retail revolution could reshape customer expectations as Alibaba and JD.com begin normalizing one-hour deliveries with steep discounts. It may pressurize global players to raise the bar for e-commerce experiences.

Industry experts highlight that these moves are not just about delivering faster or better but building customer habits: if users visit the app more often for small, frequent purchases, they’re more likely to spend on big-ticket items later.

Do you think Amazon’s revived partnership with FedEx will give it an upper hand in last-mile delivery? Can it possibly kickstart an “instant retail” revolution like China’s?

Let us know your thoughts in the comments below!