Alibaba Group Holding Ltd , the chinese e-commerce titan, in cooperation with its financial associate, is putting a $1.25 billion bet on Chinese food-delivery app Ele.me, additional fueling the battle to supply offline services to Chinese buyers through mobile phones.
The action to back Ele.me derives after Alibaba touched an agreement earlier this year to sell its stocks in Meituan-Dianping, China’s biggest online provider of movie ticketing, restaurant bookings and other on-demand services. Ele.me participates with Meituan-Dianping and Chinese search company Baidu Inc.’s Nuomi platform.
Alibaba will capitalize $900 million in Shanghai-based Ele.me, and its financial affiliate Ant Financial Services Group will contribute an extra $350 million, according to an Ant Financial spokeswoman. Ele.me’s Chinese name means, “Are you hungry?”
Alibaba has also signed up a cooperation arrangement with Ali. me, under which its own online food-services podium, Koubei, that means “word-of-mouth reputation” in Chinese, will collaborate with Ele.me. Alibaba and Ant Financial Services Group vowed in June the previous year to each invest three billion yuan ($464.2 million) in Koubei. Ele.me could not directly be get hold of for comment.
China’s Internet firms have wanted to increase their shares of the severely competitive market for smartphone applications, linking users with brick-and-mortar services such as taxi rides, food deliveries, movie ticketing and restaurant bookings.
In January, Meituan-Dianping produced $3.3 billion in the biggest private fundraising round worldwide for a venture-capital-backed startup. Worth of over $18 billion by the fundraising, Meituan-Dianping, formed by the merger of two competing startups the previous year, raised the fresh capital from investors as well as Alibaba’s chief rival, Tencent Holdings Ltd.
Many startups have overworked in the fight to entice users with big discounts and subsidies, however, Alibaba and Tencent stated they have deep pockets and supporting services just like maps, data and payments podiums to give them an advantage over the other rivals.
Alibaba’s executives have stated the firm’s dominance in e-commerce can translate to success in the offline, local-services market, indicating to the heavy traffic of hundreds of millions of consumers of its shopping app, affiliated payments business, Alipay and Taoba. The firm also has a mapping arm and other resources that can support such a business, according to the report.
Alibaba Group Holding Ltd., in its largest overseas attainment to date, stated on Tuesday it would pay approximately $1 billion for a controlling stocks in Singapore e-commerce startup Lazada Group, betting on development in populous Southeast Asia.
The attainment of Lazada, which sells everything from rice cookers to smartphones and operates e-commerce platforms throughout Indonesia, the Philippines, Malaysia, , Singapore, Vietnam and Thailand, comes as Alibaba has been consuming its $3.7 billion in free cash flow to enlarge Into e-commerce, media and logistics, along with entertainment both at home and abroad.
The contract comes after Alibaba BABA+2.29% in December settled to pay 2.06 billion Hong Kong dollars (US$266 million) for Hong Kong based newspaper South China Morning report.
Alibaba President Michael Evans said “Globalization is a critical strategy for the growth of Alibaba Group today and well into the future.”
Distinctly, an Alibaba spokesperson stated the firm will be able to tap into “Lazada’s logistics backbone.”