Ele.me is in the throes of what it dubs a “summer battle” against Meituan, the on-demand services goliath backed by Tencent Holdings Ltd. that’s prepping an initial public offering in Hong Kong. To that end, it’s been doling out subsidies to consumers, merchants and delivery partners since July, a campaign it plans to revive during the winter, Wang said. Ele.me’s also syncing its logistics data with Alibaba’s, so units and affiliates of the e-commerce giant can benefit from its own network of at least 400,000 delivery personnel daily.
“Ele.me is very important for Alibaba’s new retail strategy, it’s a foundation for the business,” Wang said during an interview in Hong Kong. “Dining and food delivery is also a service that users will use frequently, hence benefiting our payments business.”
The market for on-demand services in China is surging as people turn to their smartphones to order meals, schedule beauty treatments and hire helpers. But that’s prompting the likes of Ele.me to splurge on discounts and subsidies. Meituan itself revealed huge losses — but also a scorching pace of growth — when it filed for its much-anticipated debut.