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Alibaba is investing $1.25 billion into a Chinese food delivery company

Discussion in 'Food and Drink' started by EF-Roger, Dec 25, 2015.

  1. EF-Roger

    EF-Roger Entrepreneur

    Alibaba Group Holding Ltd has agreed to invest $1.25 billion in Chinese online food delivery service Ele.me, leading business weekly Caixin reported on Friday.

    The report, citing unidentified sources, said Alibaba will obtain a 27.7 percent stake in Ele.me, becoming its biggest shareholder.

    Officials at Alibaba could not be immediately reached for comment.

    read more Alibaba is investing $1.25 billion into a Chinese food delivery company
    setupdisc likes this.

  2. dyanmarie25

    dyanmarie25 Entrepreneur

    I am not really fond of Alibaba, but if they are planning to invest in a Chinese food delivery company, I think that's a pretty good idea for them. Let's see if it's going to be successful.
    setupdisc likes this.
  3. Cleveland76

    Cleveland76 Entrepreneur

    I'm surprised it could command such a high amount like that. We actually have some food delivery services in my area, and I've used them quite a bit over the years. The one that I used most frequently is called DeliverMeFood, and it's pretty easy and straightforward to use. They have a list of local restaurants that they will deliver from in your area, and you simply call them up and place your order, and they deliver it to your place. The fees are reasonable, you pay a flat 15% gratuity on the order (or maybe it's 18%, can't recall), plus $5-$6 for the delivery fee.

    I look at it this way, if I were to go out to eat at any of these places, I would be paying that tip anyhow, so it's really only costing me an extra $5-$6 to have the food delivered to me, which isn't bad at all. This is especially true if you are in a downtown area and would have to pay for parking anyhow.

    For a few years I had lost my license, so paying for taxi's to get me around was becoming really expensive. Not to mention it's near impossible to get a taxi in the suburbs because they prefer to hang around airports or downtown, instead of wasting gas and time to drive all the way out to the burbs to do a short drive somewhere.

    That's when I really started using the food delivery service a lot. Usually at least once a week I would treat myself and have some dinners and appetizers delivered from my favorite local restaurants. Of course, you have to be realistic and understand your food is not going to be piping hot, or super crispy. But it sure is nice to be able to enjoy it in the comfort of your own home, in your PJ's when you're in the mood. No need to get all dressed up and wait forever for a table, then have to be around a bunch of other noisy diners.
    setupdisc likes this.
  4. setupdisc

    setupdisc Moderator Entrepreneur

    Chinese food is big, and if you get the right area and demographics to start one, you can make a lot of money at it. It's smart for Alibaba to do this because most of the franchises in my area have been around for quite a while and are still doing well despite the economy. I've seen some start up and close over the years too, but asked a few of the family members I've met that run them (they are usually family owned and operated out here), and they've mentioned that even though they are free to run a business how they like and offer different foods as they feel best suited to, there are sometimes Chinese business investors and regional managers for some of them who go from place to place and decide to start one or close another based on area, profit margins, and other considerations. They tend to keep the family members employed by having them work around all of this by starting up the new location or name with them whenever they decide to do this.

    There are one or two smaller ones that didn't fare too well, but usually those started up in neighborhoods where what they charged for dishes were too high, and the people of the area had low income and couldn't afford to go there enough to keep it profitable as a business for them.

    Alibaba has a good angle though. I don't always like the way they go about things either, but I think it's a good move on their part to invest in this since they can pool their resources and do really well here.

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