Alibaba acquires food delivery platform Ele.me as it ramps up new retail strategy

E-commerce giant Alibaba Group Holding said on Monday it will fully acquire food delivery platform Ele.me, buying the outstanding shares that it does not already own from other stakeholders including Baidu.

Ele.me, one of China’s leading food delivery platforms, is expected to help boost Alibaba's “new retail” strategy, by which it aims to integrate online and offline commerce. Reports of a potential buyout of Ele.me by Alibaba first surfaced in late February.

Unlike its Tencent Holdings-backed rival JD.com, Alibaba does not directly operate its own transport and logistics operations, which puts it at a disadvantage in the growing local services market that includes on-demand deliveries of food and groceries.

Ele.me’s network of over three million delivery men will allow Alibaba to better compete in the sphere, according to analysts, who say the acquisition would complement the Hangzhou-based e-commerce firm’s online grocer, Tmall Supermarket, and its offline chain of Hema supermarkets, both of which provide on-demand grocery delivery.

The transaction values Ele.me at US$9.5 billion, according to Alibaba, which currently owns about 43 per cent of the platform together with its financial affiliate Ant Financial Services.

“We are excited for Ele.me to become a part of the Alibaba ecosystem,” said Alibaba chief executive Daniel Zhang Yong. “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.”