Ele.me, an online food delivery platform, and Koubei, a local services platform focused on in-store consumption in China, merged under an established holding company, received $3 billion.
Ele.me and Koubei work together to provide a comprehensive local services offering that is core to Alibaba.
The investment was announced on August 23, 2018, in the June Quarter 2018 Results press release:
In May 2018, we completed the acquisition of Ele.me, one of the leading online food delivery platforms in China. Ele.me and Koubei, a leading local services platform focused on in-store consumption in China, work together to provide a comprehensive local services offering that is core to Alibaba. Our plan is to aggressively invest in these businesses to gain market share and execute deep integration into the ecosystem of Alibaba service offerings, such as incorporating local services users into our new 88VIP, as well as delivery support to mom-and-pop convenience store operators on Alibaba’s Lingshoutong (LST) platform and Hema supermarket stores. We have established a company to hold Ele.me and Koubei as our combined flagship local services vehicle, which we plan to separately capitalize with investments from Alibaba, Ant Financial and third-party investors. As of the time of this announcement, we have received over US$3 billion in new investment commitments, including from Alibaba and SoftBank. As a result of this reorganization, subject to closing conditions, we will consolidate Koubei, which would result in a material one-off revaluation gain when the transaction closes.
In early August, Alibaba launched 88VIP, a new loyalty membership program designed to enhance consumer engagement and loyalty. The subscription-based program offers benefits of commerce, entertainment and local services in China. The exclusive membership offerings and privileges across the Alibaba ecosystem include discount savings on Tmall Supermarket, Tmall Global and brand stores on Tmall, coupons for consumer electronics, subscriptions to our video-streaming platform Youku and music-streaming platform Xiami, online movie tickets on Taopiaopiao, and on-demand delivery service from Ele.me.