Alibaba Considers Gobbling Up Food Delivery Giant

Alibaba Group Holding Ltd. is considering buying the remaining stake of food delivery company Ele.me, a source familiar with the matter told Caixin, as the e-commerce giant has helped the smaller firm become the top player in the business.

An Alibaba spokesperson had no comment on the deal.

Alibaba is already a large stakeholder of Ele.me, which obtained a $1.25 billion investment from the e-commerce group and its fintech affiliate Ant Financial Services Group in 2016. In April, the consortium increased its investment in Ele.me by $400 million.

Ele.me has become the country’s largest food delivery service after it acquired the food delivery arm of internet search firm Baidu Inc. in August 2017, leaving the takeout market with only two main contenders — Alibaba-funded Ele.me and Meituan Dianping, which is backed by Tencent Holdings Ltd.

Alibaba also offered support for the Ele.me-Baidu Deliveries merger.

After the Baidu deal, Ele.me held 55.3% of the market in the fourth quarter of 2017, followed by the food delivery division of Meituan Dianping, which had a market share of 41.3%, according to market data and research firm iiMedia Research.

Contact reporter Coco Feng (renkefeng@caixin.com)