Alibaba Makes An Investment Of $1.25 Billion In Ele.me

Chinese food delivery service is awarded with $1.25 billion of investment by Alibaba Group holding Ltd.

Alibaba Group Holding Ltd. has made a $1.25 billion huge investment in another food delivery business, Ele.me. This shows that the E-commerce business is making its foothold even stronger in the food delivery services market. The online shopping business will now own almost 27.7% shares in Ele.me through this recent investment.

Alibaba Group’s 27.5% shares in the Ele.me make it the biggest shareholder in the starting service. Ele.me’s shares were reported to go up by $1.09 billion to date; it achieved its major fund of $630 million earlier in August. Most of the companies that invested in this food delivery service were the rival of the e-commerce giant including JD.com and Tencent Holdings.

Alibaba Company is turning to make investments in such businesses mainly because of the growing popularity and demand of the internet and the conveyance it provides to users enabling them place order online, booking and even shop thanks to such e-commerce companies. The Chinese giant is evidently very well aware of this development and is taking the necessary actions to attract more users to its platform instead of its rivals. This investment also helps the business stand head to head with its major rivals, and since the organization has a huge share in the startup business, it will automatically have a certain amount of authority and say in the food delivery business.

The e-commerce giant also has its own food delivery service but it is small, named Koubei, it is a joint venture with another, Ant Financial. Koubei might stand a chance to become bigger in the future if the e-commerce giant’s shares in Ele.me help it merge these two businesses of the same market together as one.

This deal is beneficial for the e-commerce giant’s O2O strategy, which is online to offline and offline to online and attracting more customers to online platforms rather than the physical stores. Its O2O investments as such include Alipay, which is China’s major mobile payments service. Ele.me, when translated means Hungry Now, is online to offline based. It consists of restaurant reviews and many other facilities. The e-commerce organization has so far invested almost $8 billion the previous year in businesses of this category, this aids the organization in having part I many of the application we have in our smartphones we use on a day-today basis.

BABA stock closed at $83.78 after going red by 1.20% on Thursday, December 24.