Feb. 27 (NBD) -- China's e-commerce giant Alibaba Group will acquire all of the remaining stakes in the leading online food delivery platform Ele.me, a person close to Alibaba said.

The group was said to pay 9.5 billion U.S. dollars (0.6517 U.S. dollars per share) in cash to buy the rest of stakes in the meal ordering platform. But the person mentioned above denied this rumor.

Chen Liteng, an analyst of life service e-commerce from China E-commerce Research Center, told NBD that after the new financing round, Ele.me is now valued at around 5 billion U.S. dollars, and the valuation of the new acquisition is too high, almost twice as much as the actual value.

Ge Jia, an internet analyst shared the same view, commenting that the company only has the food delivery business, so the 9.5 billion U.S. dollars could be too much.

Photo/VCG

Given that Alibaba Group has already been the largest shareholder of the platform after a series of investments, the acquisition rumor didn't surprise industry insiders.

On 13 April, 2016, Ele.me announced that it has reached an agreement with Alibaba Group and Ant Financial. It is reported that Alibaba invested 900 million U.S. dollars while Ant Financial made an investment of 350 million U.S. dollars. According to Ele.me, the platform will still be operated and develop independently.

In May this year, Alibaba and Ant Financial planned to lead a new round worth at least 1 billion U.S. dollars. The investment is expected to be used for acquiring another food delivery website Baidu Takeaway.

Three months later, Ele.me made an announcement that Baidu Takeaway would become its wholly-owned subsidiary. Alibaba and Baidu undertake to provide the new platform with more support in the flow entry, intelligent technology, financial insurance and other fields.

An executive from an instant logistics enterprise noted that the high valuation of Ele.me may be affected by the value of its major rival Maituan-Dianping. 

After Baidu Takeaway was bought by Ele.me, Meituan-Dianping and Ele.me have become the two major takeaway giants in the sector, which is also believed to be a battle between Alibaba and Tencent.

With the new purchase, Alibaba attempts to develop its local e-commerce platform Koubei.com and compete with Tencent-backed Meituan-Dianping.

The new deal will cover the shortage of Koubei.com, internet business mode analyst Hao Zhiwei pointed out. Compared with China Internet Plus Group, the website doesn't have strong offline team, but Ele.me has such a team. The food takeaway service company can put forward targeted marketing leveraging the user data of Alibaba-backed companies, Hao added.

In January 2016, Meituan-Dianping completed its 3.3 billion U.S. dollars financing, with about 10 U.S. dollars investment from Tencent. The titan also led the new round with the value of 4 billion U.S. dollars.

The competition between two platforms has expanded from the online as well as offline consumption to various fields including traffic entry, intelligent technology and financial insurance.

By offering food delivery service, the platforms are improving their online-to-offline delivery system. The basic capacity and city-wide logistics are tested during the competition. Recently, Meituan-Dianping forged cooperation with the online clothing sale website HLA for the expansion of its business.

Email: zhanglingxiao@nbd.com.cn