Determined to capture at least 50% share with strong Alibaba backing
HANGZHOU, China, July 24, 2018 — Leading Chinese on-demand delivery platform Ele.me aims to capture at least 50% of the food delivery market in China in the near-term. Ele.me has initiated a major growth push, driven by a RMB 3 billion summer campaign, including offering red packets and new promotions, which is showing promising results in several cities across China.
The growth at Ele.me has accelerated rapidly with its integration into Alibaba’s ecosystem following Alibaba obtaining the control of the on-demand delivery platform in May.
Ele.me’s campaign to win market share recently included customer discounts and coupons for late-night snacks delivered during the FIFA World Cup tournament. The successful initiative spurred a rapid rise in food delivery in early July and Ele.me data shows sustained momentum going forward.
Customer response to the campaign have been positive across China. In Hangzhou, for example, Ele.me added 100,000 customers to its membership program in early July. In Changsha, during just the first two weeks of July, gross transaction volume climbed by almost 15% over the same period in the previous month.
“Alibaba’s support and commitment to building the leading delivery platform in China is a strong vote of confidence in Ele.me’s future success,” said Wang Lai, CEO of Ele.me. “Robust financial support and greater integration with the Alibaba ecosystem uniquely positions Ele.me in this high growth sector.”
Food delivery is one of the fastest growing industries in China. Chinese customers spent an estimated RMB 4 trillion on food in 2017, according to a report by the China Cuisine Association (CCA), and less than 10% of that total was spent on food delivery.
“We view the limited penetration of delivery in the food and beverage sector to-date as a tremendous opportunity for growth,” Wang said.
Integration with Alibaba’s ecosystem
Ele.me is making huge strides as part of the Alibaba ecosystem. Ele.me now offers delivery support to convenience store operators on Alibaba’s Ling Shou Tong (LST) platform. Potential future opportunities include partnerships with other business units of Alibaba and collaboration with nationwide food chains as their delivery partner of choice. Ele.me has 3 million registered riders serving customers on its platform.
“Alibaba has been working with merchants for nearly two decades. It has valuable and unmatched experience with enriching consumer and merchant knowledge, which is a great asset to Ele.me, and enables us to win loyal, high-frequency customers,” Wang said.
In June, Ele.me delivery orders for categories such as supermarkets, convenience stores, fresh fruits and flowers increased 110% from a year earlier.
A must-win approach to local services
Ele.me also complements Koubei, Alibaba’s affiliated local services platform and provides extended synergies. By combining Ele.me’s on-demand delivery service with Koubei’s consumer acquisition and in-store engagement capability for a range of restaurants and service establishments, Alibaba will be able to offer an integrated experience to consumers both online and offline.
“The local service market is a must-win for Alibaba as part of its New Retail strategy, and we look forward to Alibaba’s continued financial and technological support to win this market. As the spending power of Chinese shoppers continues to grow, the local services sector becomes critical for Alibaba to build customer and merchant engagement and fulfill its mission of accelerating the digital transformation of traditional retail,” Wang explained.
Ele.me has also benefited from consumer insights derived from Taobao, Tmall, Alipay, Youku and a number of apps in the Alibaba ecosystem. The ecosystem, from physical-goods orders to digital entertainment, drives traffic to Ele.me, and helps it understand the needs of Chinese consumers.
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