Alibaba to buy remaining shares in food delivery app
As it competes with Tencent services for offline consumers
Drivers of the food delivery service Ele.me prepare to start their morning shift after an internal security check in Beijing, China, September 21, 2017. PHOTO: REUTERS
Chinese e-commerce giant Alibaba said on Monday it would buy the remaining shares of Ele.me, a major platform in China’s food delivery market, as it competes with Tencent services for offline consumers.
Alibaba and affiliate Ant Small & Micro Financial Services Group currently own approximately 43 per cent of Ele.me, and the latest deal will value the startup a $9.5 billion, said Alibaba in a statement.
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Ele.me, which roughly translates as “Hungry?” is part of a fast-growing and competitive e-commerce market in China driven by consumers eager to use smartphones to make purchases from groceries to cinema tickets.
In August Ele.me bought major rival Baidu deliveries from Baidu. For Alibaba, the latest acquisition enlarges the e-commerce firm’s food delivery empire, which also includes delivery platform Koubei, as it competes with Meituan Dianping, backed by Tencent.
Alibaba and Meituan are both investing heavily in offline services, including deliveries, mobile payments, and unstaffed stores, to tap a wider demographic as China’s online commerce market shows signs of slowing.
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Ele.me will continue to operate under its own brand following the acquisition, said Alibaba, but will combine some functionalities with Koubei.
As part of the deal, Alibaba will install Alibaba Vice President Wang Lei as chief executive at Ele.me, while the current chief executive and founder of Ele.me will become chairman and serve as a special advisor to Alibaba on new retail strategies.
Alibaba and affiliate Ant Small & Micro Financial Services Group currently own approximately 43 per cent of Ele.me, and the latest deal will value the startup a $9.5 billion, said Alibaba in a statement.
Chinese consumers spend billions in ‘Singles Day’ shopping binge
Ele.me, which roughly translates as “Hungry?” is part of a fast-growing and competitive e-commerce market in China driven by consumers eager to use smartphones to make purchases from groceries to cinema tickets.
In August Ele.me bought major rival Baidu deliveries from Baidu. For Alibaba, the latest acquisition enlarges the e-commerce firm’s food delivery empire, which also includes delivery platform Koubei, as it competes with Meituan Dianping, backed by Tencent.
Alibaba and Meituan are both investing heavily in offline services, including deliveries, mobile payments, and unstaffed stores, to tap a wider demographic as China’s online commerce market shows signs of slowing.
Alibaba, Tencent rally troops amid $10 billion retail battle
Ele.me will continue to operate under its own brand following the acquisition, said Alibaba, but will combine some functionalities with Koubei.
As part of the deal, Alibaba will install Alibaba Vice President Wang Lei as chief executive at Ele.me, while the current chief executive and founder of Ele.me will become chairman and serve as a special advisor to Alibaba on new retail strategies.