Alibaba Group announced today to merge the online food delivery service platform Ele.me and its local commerce platform Koubei into a new local life service company.
According to Alibaba, the company is an important milestone with a goal of redefining urban life. It will combine the abundant service resources and instant delivery capacities of Ele.me with the mature service system of Koubei to promote the digitalization of the life service market.
“The mergence of Ele. me’s delivery and Koubei’s strategy to attract customer to the physical store is a big step for Alibaba to expand local life service and transit from new retail to new consumption,” said Zhang Yong, CEO of Alibaba in an internal letter.
The two units operate in 676 cities with over registered 3.5 million merchants and 0.67 million monthly active riders. Ele. me has about 260 million users, according to Corporate Social Responsibility Report 2017, each making about 20 orders per month; Koubei has 167 million monthly active users.
Alibaba’s June quarter report stated that “we plan to separately capitalize [the new company] with investments from Alibaba, Ant Financial and third-party investors.”
Wang Lei, CEO of Ele.me, will serve as president of the new company, reporting directly to Zhang. Fan Chi, deputy president of Alibaba Group will continue to be in charge of its Koubei business and report to Wang.
As Zhang Yong writes in his internal letter to his employees, “In this era of digital economy that combines new retail, new finance, new technology, new energy and new manufacturing, Alibaba’s local life service company not only aims to expand the catering market, but will also shoulder greater responsibilities, that is redefining urban life, making life better and more convenient.”