Alibaba strengthens its grip on Chinese e-commerce market; invests $1 billion in Ele.me

Alibaba, the Chinese e-commerce giant, has invested $1 billion in Ele.me, one of the largest player in the Chinese online food-delivery industry, furthering its clout and grip in the domestic online services segment. The latest deal valued the food startup between ~$5.5-$6 billion, and is the second largest capital infusion deal in 2017. It will provide sufficient armory to the startup as it competes with the Tencent-backed startup Meituan Dianping in a highly competitive local food delivery services industry.

Chinese online food delivery and booking market is one of the largest in the world, even surpassing the growth witnessed in other retail segments. Apart from the vanilla food delivery business, the ecommerce behemoths are pushing their payments business though such deals. While Alibaba has Alipay as its payment gateway, Tencent owns WeChat Pay to complete its varied suit of services. Tencent also has a minority stake in Ele.me after a $1 billion+ fund raising by Alibaba diluted its shareholding. Though bruised, Tencent is now investing significantly in the food business to corner a piece of the fast growing business and compete with the other global giant in the room.