Who Knew Chinese Food Delivery Could Get So Big?

Now that Ele.me's agreement with Alibaba and Ant Financial for a combined USD1.25 billion investment is signed, the company has big plans for burning the cash on delivering meals in China.

Ele.me will first cooperate with Taobao mobile and Alipay to provide high-quality meal delivery services to more users in China. Combining the online advantages of Alibaba and the offline advantages of Ele.me will help cover more consumers and create a complete O2O closed loop.

The emphasis on high-quality is important, because last month Chinese media like CCTV exposed bug-infested dirty meals delivered by Ele.me. The hit to Ele.me's quality control and brand didn't seem to dent their fundraising abilities though.

At the same time, Ele.me will begin wide cooperation with Ant Financial in credit, insurance, and financial loan services. The medium- and small- vendors and crowdsourcing delivery service providers and individuals on Ele.me will be able to gain financial services provided by Ant Financial.

Zhang Yong, chief executive officer of Alibaba Group, said that they hope Ele.me will keep on leading the development of the meal delivery service market while offering more consumer scenes and service experience to Alibaba's users.

Alibaba invested USD900 million, while Ant Financial invested USD350 million. Ele.me will still maintain independent operations and development after this round of financing. Meanwhile, Joseph Tsai, vice chairman of Alibaba Group, will join the board of directors of Ele.me.

Ele.me was established in 2009 and it had gained investments from many organizations, including GSR Ventures, Matrix Partners China, and CITIC PE. At present, its businesses cover more than 300 cities in China, with 50 million users and 500,000 restaurant partners.