Alibaba announces merger of Ele.me with commerce platform Koubei

China's e-commerce giant Alibaba announced on Friday the merger of its two major platforms, Ele.me, China's leading food delivery service, and Koubei, which links users with brick-and-mortar retailers.

[File photo: VCG]

The merger is part of the company's strategy to create a "three-kilometer circle of life" that enables its users to acquire almost everything they need for their daily life within three kilometers using its platforms. This includes restaurants, shopping malls, grocery stores, pharmacies, and delivery services.

The announcement was made via a letter issued by Alibaba's CEO Zhang Yong. The letter said that the two companies will be brought under the control of a new holding company. "Currently, the two platforms Koubei and Ele.me together join hands with 3.5 million merchants to provide services in 676 cities across China, and so the establishment of the new company is a significant milestone for Alibaba's ambitions in the field of consumption," said Zhang.

The integrated services will reportedly cover nearly 800 million residents in cities across China.

In August this year, Ele.me and Koubei reportedly received over three billion U.S. dollars in funding from investors, including Softbank.