By Runjie (Sahany) Xiao
On April 2, 2018, Alibaba Group, Ant Financial, and Ele.me jointly announced that Alibaba Group has signed a purchase agreement with Ele.me which is a local life platform founded in 2008 and includes online takeaway, new retail, instant distribution and catering supply chain. Alibaba Group is a Chinese multinational conglomerate that involves e-commerce, retail, Internet, artificial intelligence (AI), and technology. Ant Financial is an affiliated company of the Alibaba Group and it is the most valuable financial technology company in the world. Alibaba will unite with Ant Financial to acquire Ele.me for $9.5 billion. Ele.me will still continue to be an independent brand. The original CEO of Ele.me will be the new chairman of Ele.me while Alibaba Group’s Vice CEO, Lei Wang, will be the new CEO of Ele.me.
Now with the help of Ele.me, Alibaba’s new retail system includes “Half-hour Arrival” of Hema Xiansheng fresh food supermarkets, “One Hour Arrival” of Tmall supermarket, and “Two Hours Arrival of Online Store Purchasing” for a number of frontline brands. This means that people can buy groceries from the comforts of their own home and have them delivered quickly. While Alibaba benefits, they will also provide a push for Ele.me’s new retail businesses. So far, Ele.me’s new retail businesses have been initially established, which includes brand convenience stores, unmanned storage rack, and front warehouses. The cooperation between the two companies aims to form a full chain business alliance with complementary advantages, which will bring a faster, better, and more convenient services to people in China.
The successful acquisition raises the possibility of confrontation between Meituan, Alibaba Group, and Didi Takeout, all of which are business tycoons in China. Who will eventually be the winner of the Chinese life services industry? Let’s wait and see.