Alibaba's Ele.me Aims for Half of Food Delivery Market Share With Discounts
Xu Zuwei
/SOURCE : Yicai
Alibaba's Ele.me Aims for Half of Food Delivery Market Share With Discounts

(Yicai Global) July 24 -- Ele.me, one of China's two largest food deliverers, expects to gain half of the domestic market to kick out rivals Meituan-Dianping and Didi Chuxing's new food courier service by offering ample promotions.

Ele.me started a CNY3 billion (USD443 million) campaign last month to capture at least 50 percent of the market cap in China, the Shanghai-based firm said in a statement. "Alibaba's robust financial support and our integration with its ecosystem uniquely positions Ele.me in this high growth sector."

The campaign includes offering hongbaos, Chinese money packages, and promotions to clients. During FIFA World Cup games, the platform also gave special discounts to late-night deliveries.

The efforts have proven successful. In eastern China's city of Hangzhou, Ele.me added 100,000 customers to its membership program early this month. The gross transaction volume climbed by almost 15 percent in Changsha, the capital of central Hunan province, during the first two weeks of this month.

Food delivery is one of the fastest growing industries in China. Customers spent an estimated CNY4 trillion (USD588.2 billion) on food last year, and less than 10 percent of the total was used on delivery due to the affordable prices of such services, according to data from the China Cuisine Association.

Alibaba Holding Group bought Ele.me for USD9.5 billion in April, which has fueled the expansion. The food courier now has operations in 670 Chinese cities, and boasts some two million merchants on its platform.

Ele.me's arch-rival, Meituan-Dianping, filed for an initial public offering in Hong Kong last month, planning to raise USD6 billion with a valuation of USD60 billion.

Editor: Emmi Laine

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Keywords: Ele.Me , Food Delivery , Alibaba Group Holding , Meituan-Dianping , New Retail