Alibaba to acquire foodtech startup Ele.me, to become direct competitor of Meituan-Dianping

Chinese e-commerce giant Alibaba Group has been eyeing the food delivery industry for some time. Last year, it invested a whopping $1 billion in Ele.me, one of the largest players in China’s food-delivery segment, and acquired 23 per cent stake in the company.

Now, the e-commerce giant has made the proposal to buy the entire stake in its investee company this week. Alibaba Group is in talks to buy the food delivery platform Ele.me but no deal is yet in place, according to Reuters.

Alibaba plans to buy the stock from existing investors including Baidu and become the owner of the food delivery company, said a Bloomberg report.

In case of the successful completion of the deal, Alibaba will become the direct competitor of Tencent-backed Meituan-Dianping, another giant in the food delivery segment in China.

The new move by Alibaba has again broached the topic of competitiveness against its biggest rival Tencent; and the fear of both the rivals to be edged out by each other in any segment.

rising interest of Alibaba in Ele.me again boils down the competitive battle played between two Chinese Internet conglomerates -- Alibaba and Tencent.

Alibaba Vs Tencent: From China to India

The two Internet conglomerates are fighting the same competitive battle in India as well. The recent case was two swift investments by two rivals in India’s two biggest food startups.

Also Read: Dawn of new battle for foodtech crown on foreign soil ‘India’

Within a week of Alibaba $200 million investment in Zomato, Tencent-backed Dianping along with Naspers (an early backer of Tencent) led a $100 million round in Swiggy this month.

Both Chinese juggernauts are eying for deeper impact as well as penetration in India. Since, they have placed their bets across verticals such as ride-hailing, e-commerce, digital payment, social network healthcare, and grocery, now they want to dominate overall on-demand O2O space in India.