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Alibaba to merge food delivery units to get ahead in China

Sheetal Sukhija - Thursday 9th August, 2018

BEIJING, China - In a bid to be better prepared while engaging in a battle for bigger market share against Meituan-Dianping in China, Alibaba is now believed to be planning to merge its food delivery units. 

Currently, Meituan-Dianping and Alibaba are running neck-to-neck in the on-demand market in China - providing everything from food delivery to restaurant reviews.

Now, reports have revealed that Alibaba Group Holding is seeking to battle its regional rival to get a bigger share of China's multibillion-dollar on-demand services industry.

As part of its plans, the company is reportedly looking to merge its food delivery units and raise funds for the combined group - which could be valued at as much as $25 billion.

A report in Reuters stated that Alibaba's food delivery platform Ele.me will merge with its food and lifestyle services arm Koubei.

Hangzhou-based Alibaba acquired Ele.me in April for $9.5 billion, and with its merger plans - it is reportedly looking to raise between $3 billion and $5 billion for the combined entity.

Further, a report in Bloomberg has stated that Japanese conglomerate SoftBank Group Corp’s $92 billion Vision Fund will lead the investment in the merged Ele.me and Koubei operation.

Meanwhile, the China Internet Report, co-authored by the Post, Abacus News and 500 Startups revealed that Tencent Holdings-backed Meituan-Dianping, which is currently China's most-funded eCommerce start-up, has drawn over $8 billion in funding.

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