Alibaba Group, the Chinese e-commerce giant announced that after buying 43% of stakes in Ele.me, a leading food delivery platform, it decided to buy all the remaining shares of the company as it looks forward to compete with Tencent Holdings for offline customers.
The deal, which is still in process, will stand at a value of $9.5 billion, Alibaba released in a statement.
Ele.me, is the Chinese word for “Hungry?” and among the fast evolving and rapid growing e-commerce businesses present in China which is set around consumers ever more reliable on their smartphones to buy products and receive services.
The acquisition from Alibaba expands its e-commerce food delivery facilities such as several other businesses it owns stakes or bought in the last few years such as delivery platform Koubei and Indian online food delivery app Zomato in which the Chinese giant funded $ 200 million back in February this year. This acquisition spree and investment spurge comes at the back of a fierce competition between Alibaba and another rich Chinese group Tencent Holdings.
Alibaba and Meituan, a Tencent backed company, are both spending lots of capital in offline services, which includes investing on deliveries, mobile payments and unstaffed stores, to reach a larger demographic as China’s online commerce market is slowly stagnating.
Alibaba also announced that Ele.me will keep operating under its own brand name but will combine its operations with that of Koubei. Additionally, Vice President of Alibaba, Wang Lei will be promoted to Chief Executive of Ele.me while the current CEO and found will integrate the board of Alibaba and become a special advisor to Alibaba on new business strategies.