Fight against Meituan's undercurrents Alibaba strengthens control of Ele.me

　　The takeaway market, which has not had any financing news for a long time, has finally seen new developments recently. A filing submitted by Alibaba Group to the Securities and Exchange Commission (SEC) recently showed that in April this year, Alibaba and Ant Financial invested US$400 million in Ele.me. This is also another collaboration after the two invested $1.25 billion in Ele.me last year. After this increase in holdings, it means that Alibaba will have more say in Ele.me. Industry insiders believe that Alibaba's increase in holdings will further help Ele.me expand its market and confront its competitors such as Meituan Takeout, and will also accelerate the changes in the market structure of takeout.

　　According to the document, in April this year, Alibaba Group and Ant Financial invested US$400 million in Ele.me, of which Alibaba invested US$288 million and Ant Financial invested US$112 million. Currently, Alibaba Group holds 23% of Ele.me's equity.

　　In April 2016, Alibaba and Ant Financial invested US$1.25 billion in Ele.me, of which Alibaba invested US$900 million and Ant Financial invested US$350 million. The transaction was completed in August of that year. In May this year, it was reported that Ele.me is conducting a round of $1 billion in financing, but Ele.me has not commented.

　　Regarding this investment, some industry insiders said that Alibaba will further grasp Ele.me, and the latter can also use the Alibaba group as a backer to further expand its market share and service content, adding confidence to the next step of competition with other platforms of the same type.

　　After receiving investment from Alibaba last year, Ele.me CEO Zhang Xuhao said in an open letter that Alibaba and Ant Financial have huge traffic, business genes, payment and financial services advantages, and understand and value the O2O market. Ele.me has rich consumption scenarios and sufficient offline resources. The cooperation between the two parties will provide more new models for the local life service market. In addition, the joining of Alibaba also provides multiple support for Ele.me's B-end and C-end and platform backend.

　　While Alibaba invested heavily in Ele.me last year, it also incorporated its reputation-worthy takeaway business into Ele.me. This was also seen by industry insiders as Alibaba showing goodwill to Ele.me, and it also prompted the takeaway industry to form a "three-legged" pattern. However, with the recent "continuous storm" in the takeaway industry, Alibaba's increase in holdings in Ele.me will further accelerate the change in the takeaway market structure, especially the competition between Ele.me and Meituan Takeaway will further intensify.

　　According to the 2016 China's third-party catering takeaway market research report, the overall transaction volume of the domestic takeaway market in 2016 reached 176.15 billion yuan, an increase of 361% from the 38.21 billion yuan in 2015. Among them, Ele.me and Meituan Takeout accounted for 34.6% and 33.6% of the overall market share respectively in the top two. The market share gap between the two is still small, which means that the competition between the two will continue in terms of market size. Meituan Dianping CEO Wang Xing also publicly stated recently that his poor relationship with Alibaba and that Alibaba "at all costs" support Ele.me has caused trouble for Meituan in terms of takeaway. He also revealed that Alibaba spent $1 billion a year to support Ele.me.

　　In this regard, some industry analysts believe that in the first half of this year, the takeaway market began to undergo many changes. Takeaway platforms should not only compete in market size, but also compete in distribution, service, food safety, and market segments. As relevant departments in various places tighten the supervision of takeaway platforms, they have also played a certain restrictive role in the development of the platform's business, which has also made the homogeneity problem of takeaway platforms in terms of merchants, services, etc., and accelerating differentiated layout will be the focus of the next development of takeaway platforms.

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