Alibaba to buy out China online delivery platform Ele.me
ALIBABA Group has announced from its Hangzhou headquarters that it will acquire all outstanding shares that it does not already own in Ele.me, a major online delivery and local services platform in China.
The move will set the enterprise value of Ele.me at US$9.5 billion. Alibaba and its affiliate Ant Small and Micro Financial Services Group Co. Ltd currently own close to 43 percent of the outstanding voting shares of Ele.me.
Alibaba Group CEO Daniel Zhang said this acquisition would deepen Ele.me’s integration into Alibaba’s ecosystem and advance Alibaba’s ‘new retail’ strategy to provide a seamless online and offline consumer experience in the local services sector.
“We are excited for Ele.me to become a part of the Alibaba ecosystem,” Mr 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.”
Ele.me’s fast local delivery service is expected to build on its core expertise in food delivery to provide consumers with a wider range of products and services on-demand. This expansion of offerings will allow Ele.me to efficiently utilize its large delivery force that currently fulfils orders in cities across China.
Mr Zhang said Ele.me also complemented Koubei, Alibaba’s affiliated local services platform and provided extended synergies. 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 experience to consumers both online and offline.
Zhang Xuhao, founder of Ele.me, said, “This acquisition shows that we have built Ele.me into one of China’s most valuable internet businesses. Our customers, merchants and partners will benefit from our further integration into the Alibaba family. We share the same strategic vision that New Retail has a bright future and being part of Alibaba’s ecosystem will take Ele.me’s growth to a new level.”
Ele.me will continue to operate in its own brand and work closely with its existing partners and merchants. Alibaba will lend its full support to Ele.me including access to its New Retail infrastructure, product offerings and technology expertise, according to Alibaba’s Mr Zhang.
Upon completion of the acquisition, Zhang Xuhao will become chairman of Ele.me and special advisor to Alibaba’s CEO on New Retail strategy.
Wang Lei, vice president of Alibaba Group, will become chief executive of Ele.me. Mr Wang joined Alibaba in 2003 and has held a number of senior positions in Alibaba’s consumer e-commerce, B2B, O2O service and healthcare businesses.