Alibaba Group is eyeing a greater share of China’s food-delivery market after announcing it would acquire the remaining shares in Ele.me.
The deal will give Alibaba full control of Ele.me, having already held roughly a 43 per cent stake in the leading online delivery service.
The transaction implies an enterprise value of US$9.5bn for Ele.me. Alibaba, along with its affiliate Ant Small and Micro Financial Services Group, invested US$1.25bn in Ele.me in 2016.
“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,” Alibaba Group chief executive Daniel Zhang said.
Acoording to data from Analysys, China’s food-delivery market reached US$10.7bn in the fourth quarter last year, up 16.2 per cent from the previous three-month period.
Ele.me's strong possition in the rapidly growing market was enhanced in August 2017 when it merged with fellow food-delivery specialist Baidu Deliveries.
“Ele.me’s fast local delivery service will build on its core expertise in food delivery to provide consumers with a wider range of products and service on-demand,” a statement from Alibaba said.
Ele.me will continue to operate under its own name with Alibaba to offer full technical support as it looks to further digitise the operation.