Chinese eCommerce company Alibaba is reportedly going to invest $1.25 billion in Ele.me, a food delivery service based in Shanghai.The deal would make Alibaba the startup’s biggest shareholder, with a 27.7 percent stake.

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Ele.me was founded in 2008, and has raised $1.09 billion till date. Its investors include Alibaba’s rivals – Tencent and JD among others, and post this round, the former will become the biggest stakeholder in the food delivery firm.

Ele.me, which roughly translates as ‘Hungry Now?‘, is part of a trend in China for what is known as online-to-offline (O2O) services. These include taxi hailing and restaurant review apps that link smartphone users with offline businesses.

As more Chinese use their phones for everything from shopping to booking restaurants, China’s internet giants Alibaba, Tencent and Baidu are increasingly investing in these services to attract more users to their own platforms.

Earlier this month, Alibaba also confirmed its acquisition of Hong Kong English-language newspaper, the South China Morning Post.

Alibaba, the world’s biggest e-commerce company, and social networking and video games titan Tencent together spent more than $8 billion last year alone backing sometimes strikingly similar ventures, such as taxi hailing apps Kuadi Dache and Didi Dache.

In February, Didi Dache and Kuaidi Dache, backed by Tencent and Alibaba respectively, merged to form Didi Kuaidi, the largest taxi-hailing firm in China.

O2O food delivery game is strong in China, evidently all the existing tech giants want a slice of the pie in every major player in this space.

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Sangeeta Ghosh

Sangeeta is an engineering graduate and is passionate about painting and music. She is always blooming with new ideas and is a real go to person when you are searching for one. Exploring good dining places across the city is her favourite off-field indulgence. At KnowStartup, she is an integral part of the editorial team.

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