Alibaba to Buy Chinese Takeout Giant Ele.me for USD9.5 Billion
Guan Jian
(Yicai Global) Feb. 27 — Chinese e-commerce behemoth Alibaba Group will acquire China’s biggest online food delivery firm Ele.me in a deal worth an unconfirmed USD9.5 billion, an insider close to the deal told Yicai Global.
The Hangzhou-based firm together with its Ant Financial Services arm already own a 40 percent stake of the company, operated by Shanghai Rajax Information Technology Co., and will buy out the remaining shareholders including tech titan Baidu Inc.
The acquisition will make Alibaba one of China’s most dominant players in the meal delivery sector, only rivaled by Meituan-Dianping, backed by China’s biggest tech firm Tencent Holdings Ltd.
Ele.me could be integrated with Alibaba’s fast-growing New Retail division, run by Chief Executive Zhang Yong, upon completion of the deal. New Retail has become a key term in China’s progressing consumer economy as of late. Alibaba Chairman Jack Ma coined the term in 2016, and describes it as “the integration of online, offline, logistics and data across a single value chain.”
Alibaba incorporated local services platform Koubei into Alibaba Group at the start of the year under the guidance of Zhang, and it has become one of four core components of the group’s New Retail framework. The other three units are apparel (Tmall, InTime department stores and others), home appliances, (Tmall’s electronics website and Suning brick-and-mortar stores), and groceries and fast-moving consumer goods (Hema fresh produce outlets, Tmall convenience stores and Exfresh B2B fresh produce delivery).
After a USD1 billion investment in Ele.me last year, Alibaba made it clear that the food delivery platform would focus on home delivery services, while Koubei gave priority to referrals of customers to shops and restaurants. Their respective market positioning will remain unchanged after the acquisition of Ele.me, but Ele.me will likely take on some new businesses under Alibaba, given the latter’s strategy to apply the New Retail philosophy to local service operations.
