Alibaba taking the leap into offline space
Alibaba is seeking to upgrade its delivery service by launching an updated version of its on-demand delivery platform Ele.me, following the Internet giant's announcement last week that its delivery service will be merged with lifestyle services affiliate Koubei in a bid to strengthen offline service.
Baidu's delivery arm, Baidu Waimai, which was acquired by Ele.me last year, will take the new name of Ele.me's Star Pick.
Ele.me's delivery network Fengniao will serve all retail platforms of Alibaba, instead of just catering businesses, as part of the upgrade, Alibaba vice president and chief executive of Ele.me, Wang Lei, said.
Alibaba Local Lifestyle Services Company, which is the combined entity of Ele.me and Koubei, would serve as a holding company to drive forward the Internet giant's ambition to link not only online merchants but offline service providers.
Koubei has connected with 300,000 domestic restaurants to offer online ordering services to help caterers get a better idea of existing and potential diners.
They will partner with the entertainment show "Perfect Restaurant," to be aired on Alibaba's video streaming site Youku later this month, to promote its one-stop solution for caterers and analyze and grow its user base.
Ele.me will select high quality caterers on the Ele.me Star Pick platform and service will be available in 13 cities, which will be gradually extended to the rest of the country.
Ele.me and Koubei are also set to benefit from a wide range of infrastructure such as supply chain, digital marketing and financial capabilities within Alibaba's ecosystem.
For example, Koubei is seeking to link with one million domestic restaurants by providing them with data analyzing capabilities to better promote their catering service.
The retail sales of China's catering businesses hit 3,964.4 billion yuan (US$566 billion) in 2017, posing an annual increase of 10.8 percent. The growth rate was 9.8 percent in the first eight months of this year, according to the China Cuisine Association.
The rapid development of the food delivery industry is part of the reason, according to Feng En'yuan, deputy director of the association, and Internet companies are betting on the trend to appeal to users.
