At 11:00 a.m. on April 2, Ele.me and Alibaba officially announced that Alibaba has signed an acquisition agreement and will complete the wholly-owned acquisition of Ele.me with Ant Financial for US$9.5 billion. It has also become the largest all-cash acquisition event in China’s Internet industry. Ele.me: From “Don’t call me Mom when you’re hungry” to “Make Everything 30”
As of this year, Ele.me has been developing for a full 10 years, but for most people, knowing that Ele.me is Maybe it all started with the brainwashing slogan "Don't call me mom when you're hungry" and crazy subsidies. Ele.me is just a takeaway company. Indeed, in the past ten years, Ele.me can be said to have pioneered the online food ordering industry. In the battle with strong competitors such as Meituan and Baidu Waimai, it has gradually improved the food delivery industry and changed people's lifestyles.
However, when almost everyone thought that Ele.me was just a food delivery company, Ele.me founder Zhang Xuhao said: "Ele.me is essentially a transaction and logistics network." In 2017, Ele.me founder Zhang Xuhao said: At the annual meeting, Zhang Xuhao mentioned, “In addition to takeout, there are all things. This all things are a consumer goods market that is even larger than takeout, with an annual transaction volume of 30 trillion. Today we already have a very mature transaction The platform is a huge instant delivery network. We can deliver meals to our hands in 30 minutes. Why can’t we deliver flowers, fruits, and daily consumer goods in supermarkets to our consumers in 30 minutes?” According to this, are you hungry? Changing the corporate vision from "Better life within reach" to "Make Everything 30" aims to form a 30-minute speed dating network and connect everything in the world to everyone's 30-minute life circle.
“Make Everything 30” is not just talk. As early as August 2015, Ele.me established Hummingbird Delivery, a nationwide instant delivery system, focusing on instant delivery to the last mile of local life. Currently, Hummingbird's average daily delivery orders exceed 4.5 million, and its services cover more than 1,200 large, medium and small cities across the country, with more than 1 million cooperative merchants and more than 3 million riders. With the support of such a strong team of riders, food delivery is no longer just the delivery of food, but also the delivery of many consumer goods and even the entire new retail system. Taobao allows people across the country to obtain goods thousands of miles away within a few days. JD.com, Suning, etc. have reduced this cycle to one day or even half a day. Ele.me and Hummingbird delivery have further reduced the delivery time to less than 30 minutes. Alibaba: There is an urgent need for a local instant delivery network to realize the "three-kilometer ideal living circle" of new retail
In October 2016, Jack Ma officially proposed the "new retail" strategy, proposing that "there will be no e-commerce in the future, only online and offline New retail combined with logistics”. Before that, Alibaba had already brought Intime, Hema, etc. under its banner. In 2017, Alibaba spent tens of billions of dollars to invest in large department stores such as Xinhuadu, Sanjiang Shopping, Lianhua Supermarket, and Sun Art Retail. According to Alibaba’s current CEO Zhang Yong, new retail is about moving from online to offline, from clothing, food, housing and transportation to eating, drinking and having fun. In fact, it is about creating a “three-kilometer ideal living circle” for users.
In order to ensure rapid response within the "three-kilometer ideal living circle", in January this year, Tmall and Cainiao announced that they would jointly launch a "scheduled delivery" service with offline stores, with delivery within 2 hours at the fastest For users within 3 kilometers, Watsons and Zhou Heiya have already joined. At the same time, New Word of Mouth, which focuses on in-store services, has also been incorporated into Alibaba's new retail system, and business conditions are reported directly to Alibaba CEO Zhang Yong, which means that the new retail strategy has been further upgraded within Alibaba.
However, for Alibaba, and even if it invests a lot of manpower and material resources to build the rookie alliance, Alibaba's logistics system is still in a weak position compared with its old rival JD.com. In this case, it is not a wise decision to spend a lot of resources to form a team of riders that can deliver goods within 3 kilometers. The "godson" Ele.me, who has already invested in shares and gradually occupied a controlling position, can achieve instant delivery in 30 minutes through Hummingbird Delivery, which coincides with the concept of the "three-kilometer ideal living circle". Through the acquisition of Ele.me To strengthen timely delivery capabilities, it is undoubtedly very cost-effective for Alibaba. Alibaba’s wholly-owned acquisition of Ele.me: Can it be a win-win situation?
For Alibaba, the greatest value of Ele.me is its more than 3 million Hummingbird delivery personnel across the country and its nationwide real-time logistics system.
After the acquisition of Ele.me, the stable technology and rich experience accumulated by Hummingbird Express in the local timely delivery network in recent years have enabled Hippo’s “half-hour delivery”, 24-hour home emergency service, Tmall supermarket one-hour delivery, and many first-line brands’ “ The achievement of many small goals of new retail, such as "delivery in stores within two hours for online orders", is guaranteed.
As for Ele.me, many people believe that this acquisition means the exit of founder Zhang Xuhao. However, Zhang Xuhao said that in the past six months, many investors were willing to continue to make financial investments in Ele.me to help it develop independently and go public. The reason why we chose Alibaba's acquisition is because we realize that the next competition is not just about capital, but more importantly, resources. Deeper resource integration and ecological support will bring competition to another dimension. He is more excited about Alibaba’s wholly-owned acquisition, because being officially included in Alibaba’s platform means that Ele.me can enjoy truly sufficient resources, making it easier to achieve the goal of “Make Everything 30”.
Zhang Xuhao gave this explanation for his role as chairman of Ele.me and Zhang Yong’s special assistant for new retail strategy, while Wang Lei, vice president of Alibaba Group, served as CEO of Ele.me: “The founding team of Ele.me started from school and lacks experience and system in some aspects. I hope Alibaba will send an experienced CEO to join in to help build Ele.me’s operating system and improve its organizational capabilities, so as to create a better future for Ele.me. It takes ten years to be ready.”
Zhang Xuhao once said, “I just want to develop independently, and one day I can ring the bell, go public, and be the number one in China.” In the end, he chose to sell Ele.me. We don’t know whether he will gradually fade out after the company was acquired by Alibaba, like the founders of UC, AutoNavi, and Youku. But one thing is that Ele.me’s “Make Everything 30’” is quite consistent with Alibaba’s “three-kilometer ideal living circle”. We will wait and see how it develops in the future.
Qianqi has rich experience in equity incentive projects and regularly organizes relevant seminars, hoping to have in-depth exchanges with more companies. We will launch a series of articles on equity incentives and business partnerships for various companies, so stay tuned!