Ele.me

Ele.me. It is a major Chinese online food delivery and local services platform, founded in Shanghai in 2008. The company was acquired by the Alibaba Group in 2018 and integrated into its Alibaba Local Services division, operating alongside platforms like Koubei and Fliggy. As a dominant player in China's on-demand economy, it connects millions of consumers with hundreds of thousands of restaurants and retail partners.

History

The company was established in 2008 by Zhang Xuhao and Kang Jia, who were students at Shanghai Jiao Tong University. Initial growth was fueled by the rapid expansion of smartphone usage and mobile internet in China, with significant venture capital funding from firms like Sequoia Capital China and Tencent. A pivotal moment occurred in 2015 when it received a strategic investment from Alibaba Group and its financial affiliate Ant Group, marking the beginning of a deeper alliance. Following intense competition with rival Meituan, it was fully acquired by Alibaba Group in 2018 for approximately $9.5 billion, subsequently merging with Alibaba's Koubei to form a comprehensive local services unit.

Business model and services

Its core business revolves around a three-sided marketplace connecting consumers, restaurants, and delivery riders. Revenue is generated primarily through commission fees from partner restaurants, delivery charges paid by customers, and advertising services for merchants on its platform. Beyond food delivery, it has expanded its offerings to include grocery delivery, retail convenience through partnerships with chains like Suning.com, and on-demand services for items from flowers to pharmaceuticals. The platform is deeply integrated with Alibaba's ecosystem, including payment via Alipay and membership benefits through 88VIP.

Technology and operations

The platform relies on sophisticated algorithms for order dispatch, real-time route optimization for riders, and dynamic pricing models. Its intelligent logistics system, often compared to the kernel of a ride-hailing app like Didi Chuxing, calculates optimal delivery paths and estimated times by analyzing vast amounts of traffic data. A vast network of millions of registered delivery riders, managed through a hybrid of direct employment and flexible contractor models, fulfills orders. It also invests in automation technology, including experimentation with delivery robots and drones, and leverages cloud computing infrastructure from Alibaba Cloud.

Market position and competition

For years, it has engaged in a fierce duopoly for market share in China with its primary competitor, Meituan. The competitive landscape was shaped by the "food delivery wars," a period of heavy subsidization and promotional spending by both companies backed by Alibaba Group and Tencent, respectively. Its market position is intrinsically tied to the broader strategic objectives of the Alibaba Group in competing within the O2O (online-to-offline) commerce sector. While its user base is massive, industry reports from analysts like iResearch often show it trailing Meituan in terms of overall transaction volume and active users.

Controversies and challenges

The company has faced significant scrutiny over labor rights and the welfare of its delivery riders, including issues related to accident rates, income stability, and the pressures of its algorithmic management systems. It has been involved in antitrust investigations led by China's State Administration for Market Regulation, part of a broader regulatory crackdown on the technology sector. Other operational challenges include maintaining profitability amid high operational costs, managing relationships with merchant partners over commission fees, and addressing environmental concerns related to packaging waste from the delivery industry.

Category:Alibaba Group Category:Online food ordering companies Category:Companies based in Shanghai Category:Companies established in 2008