NEWS WRAP: Alibaba to roll Ele.me into newer Taobao Instant Commerce

The e-commerce giant will retire the meal delivery brand more than a decade after Ele.me revolutionized the sector using GPS location-based technology

By Doug Young

E-commerce giant Alibaba Group Holding Ltd. (BABA.US; 9988.HK) will retire the Ele.me brand, as it retools China’s earliest meal delivery giant for a new era of “instant retail,” Chinese media reported this week, without citing any named sources. According to one of those sources, Sina.com, Alibaba will officially rebrand Ele.me’s app as Taobao Instant Commerce starting on Dec. 1.

Ele.me’s huge fleet of drivers, whose blue helmets, uniforms and food delivery pouches are a fixture on the streets of most major Chinese cities, have already begun taking orders for Taobao Instant Commerce, according to Sina.com. Taobao also operates its own independent fleet of deliverymen, whose orange, racing-style uniforms are quickly becoming a fixture on the streets of major cities like Shanghai.

Alibaba hasn’t commented on plans to retire the Ele.me name, after acquiring the company in stages through 2018 in a series of purchases that valued it at nearly $10 billion. Since then, however, the brand has remained relatively quiet as it lost market share to more aggressive rival Meituan (3690.HK). JD.com (JD.US; 9618.HK) entered the arena this year.

The three companies have become embroiled in a stiff price war with JD.com’s entry to the market, prompting the government to try to intervene.

Founded more than a decade ago, Ele.me revolutionized China’s takeout dining scene by making takeout food delivery fast, efficient and cheap using global positioning technology that was in its infancy at that time. More recently, all three companies have been adding other locally sourced products to their services, competing with each other to see who can deliver such goods the fastest.

Alibaba launched Taobao Instant Commerce at the end of April this year, and appears to be rapidly expanding the service in recent weeks following an initial trial period. At the time of the launch, it said the service was meant to complement Ele.me’s core meal delivery services with similar quick deliveries for other products like groceries, snacks and daily essentials within 30 minutes to an hour.

Alibaba’s latest “instant retail” campaign resembles a similar effort about a decade ago, when founder Jack Ma launched a “new retail” drive that combined traditional brick-and-mortar retailing with online shopping. But that campaign ultimately yielded relatively few synergies, and Alibaba ended up selling many of the brick-and-mortar retailing assets it purchased at the time.

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