Alibaba Group would acquire all of the outstanding shares that it does not already own in Ele.me, a leading online delivery service in China, to deepen the platform’s integration into Alibaba’s ecosystem and further expand the technology company’s New Retail strategy for local services. The transaction implies an enterprise value of $9.5 billion for Ele.me.
Alibaba and its affiliate, Ant Small and Micro Financial Services Group, currently own roughly 43 per cent of Ele.me, according to a statement. The companies had invested $1.25 billion in Ele.me in 2016.
“Looking forward, Ele.me can leverage Alibaba’s infrastructure in commerce and find new synergies with Alibaba’s diverse businesses to add further momentum to the New Retail Initiative,” said Daniel Zhang, chief executive officer, Alibaba Group.
The addition of Ele.me will complement Alibaba’s affiliated local-services platform Koubei to offer an integrated experience to consumers both online and offline, noted the statement.
The company said Ele.me will continue to operate under its brand and that Alibaba will offer full technical support and expertise to further digitise the operation. In addition, upon completion of the deal, the founder of Ele.me, Zhang Xuhao, will assume the role of chairman at Ele.me as well as serving as a special advisor to Alibaba’s CEO on New Retail strategy. Zhang will be succeeded by Wang Lei, vice president of Alibaba Group.
New Retail, a term that was coined by Alibaba founder Jack Ma two years ago, is a way of revamping the traditional retail space by creating a frictionless blend of online and offline shopping underpinned by cutting-edge technology. This allows vendors to bolster their engagement with customers and get quicker and more precise feedback on consumer preferences, thereby improving their business. (KD)
Fibre2Fashion News Desk – India