Alibaba to acquire food delivery platform Ele.me at a valuation of $9.5 billion

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Published: April 2, 2018 1:41:28 PM

This comes in after Alibaba made it fairly clear that the ‘Physical Retail’ is a part of its new retail strategy to combine ecommerce and offline stores.

Alibaba to acquire food delivery platform Ele.me at a valuation of $9.5 billion

Known for food deliveries, Ele.me, is being acquired by Chinese Internet Behemoth Alibaba Group. As expected, they’ll be buying the outstanding shares. Ele.me claims to be the biggest online delivery platform in China. In a recent announcement, Alibaba quoted the deal was valued at $9.5 billion. Alibaba and its investment affiliate Ant Financial, first, invested in Ele.me in 2016 owning 43 percent of the company’s voting shares.

This comes in after Alibaba made it fairly clear that the ‘Physical Retail’ is a part of its new retail strategy to combine ecommerce and offline stores. The aim here is to make it easier for people between brick and mortar stores and online Alibaba businesses. For instance, if they like a watch on an offline store, they can order it online for almost immediate home delivery.

Founded in 2008, Ele.me plans to run under the same brand. The company further provides services like Fengniao – express local deliveries. After the deal goes through, Alibaba has stated that founder and chief executive officer Zhang Zhuhao will become chairman of food delivery company and advisor to Alibaba Group CEO, Daniel Zhang, on its new retail strategy. While Wang Lei, President of ALibaba Group, will take over Ele.me as CEO.

Commenting on the development, Zhang said, “Under the leadership of its founder and management team, Ele.me has achieved leading market share in China’s online food delivery and local services sector. Our shared belief that New Retail will create more value for customers and merchants has brought us together. Looking forward, Ele.me can leverage Alibaba’s infrastructure in commerce and find new synergies with Alibaba’s diverse businesses to add further momentum to the New Retail initiative.”

Many media publications had reported that Alibaba was planning to buy the rest of the shares of Ele.me from its existing investors including Baidu. Alibaba further stated that the platform compliments its affiliate Koubei, a company that helps restaurants and other establishments go online.

In a statement, Alibaba quoted, “By combining Ele.me’s online home delivery services with Koubei’s consumer acquisition and engagement capability for a range of restaurants and service establishments, Alibaba will be able to offer an integrated experiences to customers both online and offline.”

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