Alibaba Integrates Ele.me And Fliggy Into Core Business To Battle Rivals In Delivery War

Alibaba Group Holding BABA is merging its food delivery platform Ele.me and online travel agency Fliggy into its core e-commerce business.

The restructuring signifies Alibaba’s strategic rechanneling of resources towards its core revenue drivers, a move necessitated by fierce domestic rivalry in the on-demand delivery sector with JD.com JD and Meituan.

Meituan’s daily orders reportedly reached 90 million recently, while JD.com’s service hit 25 million orders earlier in June.

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Alibaba announced on Monday that daily orders have reached 60 million.

Ele.me CEO Fan Yu and Fliggy CEO Zhuang Zhuoran will report directly to Jiang Fan, who leads Alibaba’s E-commerce Business Group, SCMP reported on Monday, citing Alibaba CEO Eddie Wu Yongming’s internal memo.

Alibaba’s E-commerce Business Group supervised domestic platforms Tmall and Taobao and the company’s global e-commerce operations.

The fierce competition in China’s on-demand delivery and e-commerce sectors is pushing major players to innovate. As rivals like JD.com and Meituan ramp up their logistics, Alibaba is fortifying its delivery network.

Demonstrating this focus, in April, Alibaba launched a new rapid-delivery feature on its Taobao shopping platform, directly addressing the consumer demand for quicker receipt of goods and aiming to stay ahead in the delivery race.

Reportedly, JD.com sought to hire tens of thousands of full-time riders. Meanwhile, Meituan held a commanding 70% of China’s food delivery market, as cited by SCMP, which referenced Leiphone.com last week.

Meituan has been aggressively expanding globally through its Keeta brand to beat the domestic slowdown. Since launching in 2023, it has held a 44% market share in Hong Kong, SCMP cited a March 2024 survey by Measurable AI.

Meituan launched Keeta in Saudi Arabia and plans to launch it in Brazil. JD.com will reveal a new food delivery model in July.

According to Bocom International, as cited by SCMP, in 2024, Meituan held 65% of the food delivery market, with Ele.me at 33%.

Price Action: BABA shares are trading lower by 0.50% to 112.45 premarket at last check Monday.

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