Baidu sells meal delivery business to ele.me

Chinese Internet giant Baidu has officially sold its meal ordering and delivery services, Baidu Waimai, to rival ele.me. It's understood that Baidu Waimai will continue to operate as an independent entity for a year.

An ele.me take-out delivery box. [Photo: Xinhua]

This follows the failure of Baidu to sign a deal for its meal delivery service with Meituan and SF Express.

Baidu Waimai had reportedly been in merger talks with Meituan since September, 2016, which failed to materialize. It then reportedly tried to engage in a deal with SF Express to operate its food delivery business. However, reports suggest they could not reach a consensus on price and conditions, and negotiations broke down, according to the China Daily.

Caricatures of the top three meal delivery services in the domestic online food delivery market: From left to right, ele.me, Meituan and Baidu Waimai. [Photo: VCG]

Meanwhile, according to reports, e-commerce giant Alibaba is negotiating for a full takeover of ele.me through a new share purchase agreement. Alibaba currently controls about 28 percent of ele.me after an investment worth over 1.2 billion US dollars in 2016. Alibaba and Ant Financial Services Group have been searching for a new round of financing for ele.me worth at least 1 billion US dollars, reports Bloomberg.

Zhang Xuhao, CEO of ele.me, says that the company and Baidu are to create a co-brand, with teams and members of Baidu Waimai remaining unchanged. Baidu Waimai has been aiming its services at the high-end of the market, so its AI technology can support the two companies, said Zhang.

In addition, the two sides will operate from two headquarters in the future, one at the Shanghai Lazhasi Information Technology Limited Company, and the other in Beijing.