In a $9.5 billion deal, Alibaba Group Holding Ltd. is buying startup Ele.me to increase its presence in China’s fast-growing market for local delivery of food and other services.
Ele.me (Mandarin for “hungry yet?”) operates a large number of delivery people on motorbikes across the country. This is an interesting market as people increasingly turn to their smartphones to order food, schedule beauty treatments and hire domestic helpers, Bloomberg reports. Alibaba regards food delivery as one of the most frequently used applications, making this industry the most important entry point in the local services sector.
Having a large local instant delivery network of a food delivery service is considered to be an essential piece of the commerce infrastructure. E-commerce giant Alibaba has invested substantial amounts of money in this market. It acquired longtime delivery affiliate Cainiao and also invested substantially in warehouses.
Further reading on Bloomberg.com