Alibaba said on Monday, April 2 that they are to buy remaining shares of Ele.me, a major food delivery app in China. Already owning (jointly with Ant Small and Micro Financial Services) about 43% in Ele, Alibaba wants the rest to gain a boost in its competition against Tencent in the offline market.
The deal will value approximately $9.5 billion. Ele.me has its basis of grabbing the market via delivering groceries and more to consumers who love to use smartphones for purchase. The app is presently on a peak of growth in the market. Last August, they acquired major rival Baidu Deliveries of Baidu Inc.
A confirm of the deal will strengthen Alibaba’s food delivery division that already includes Koubei, a delivery platform. This is a direct competitor of Meituan Dianping, which is backed by Tencent.
The present online scenarios of China have been a bit on the lower scale than usual, with people feeling the initial habituation and preparing to settle down with new conveniences without being alarmed. This is where Alibaba and Meituan are heavily investing in offline service that includes deliveries, mobile payments and unstaffed stores.
After the acquisition is confirmed, Ele.me will keep on operating under its own brand and will share functionalities with Koubei. Alibaba VP Wang Lei will be the CEO of Ele.me and the current CEO and founder of Ele.me will be the chairman and serve the Alibaba board with special advisements on retail strategies.
Stay tuned to know more about the final acquisition of Alibaba over Ele.me.