Alibaba Group Holdings the giant of e-commerce based in China announced Monday it would be acquiring the remaining shares of food delivery app Ele.me, which has becomes a big platform across China. Alibaba is battling Tencent Holdings for consumers who are offline.
Alibaba and its affiliated Ant Small Financial Services Group currently owns 43% of the app Ele.me, and this new deal would value the app startup at $9.5 billion said a statement released by Alibaba.
Ele.me, which translates roughly to “Hungry?” is part of a competitive and fast-growing e-commerce market across China driven by the eagerness of consumers to use their smartphones for purchasing from cinema tickets to groceries.
During August of 2017, Ele.me acquired Baidu delivers a major rival from Baidu Inc. the latest move by Alibaba enlarges the firm’s empire of food delivery that includes Koubei a delivery platform as it competes against Tencent Holdings’ backed Meituan Dianping.
Meituan and Alibaba both are investing heavily in services offline that include mobile payments, deliveries and unstaffed stores, in order to tap into the wider demographics as the online commerce market in China shows signs it is slowing.
Ele.me is going to continue operating under its brand following this acquisition, announced Alibaba, but will be combining with Koubei some of its functionalities.
As part of this deal Alibaba is going to install Wang Lei its Vice President as the CEO of Ele.me, while the current CEO and the Ele.me founder will be the chairman and become a special advisor to Alibaba for retail strategies.