Since about last week, there have been rumors that "Douyin is currently talking to Ali about acquiring Ele.me".
Today, the rumor is starting to become more concrete, "It has reached the stage of talking about the price, and the valuation is about $7 billion, and if it goes well, it will be able to land in the spring." ”
Important elements such as time, people, and events are all passed on, making people feel that the matter has been decided.
Even, Meituan, as the first brother in the domestic and foreign selling markets, fell by about 8% today because of this rumor, closing down 5.65%:
After all, the combination of Douyin, which has huge traffic, and Ele.me, which is the second largest seller in the domestic and foreign sales industry, does seem very reasonable, and it definitely poses enough threat to Meituan.
To this end, the editorial department of Zhiwei asked Alibaba for verification, and the public relations staff replied: The response of both parties shall prevail.
Regarding this matter, Douyin insiders replied that "Douyin has no such plan", and Ele.me insiders responded that "the cooperation between the two sides has been steadily advancing, but the so-called 'acquisition' is completely nonsense".
However, neither of these two responses adopted a more "formal" stance, so they still left the market with a certain reverie.
However, in the opinion of the editorial department of Zhiwei, the possibility of this matter at this stage is almost zero.
First, Alibaba is strategically unlikely to sell Ele.me entirely.
In April 2018, Alibaba and Ant Financial acquired Ele.me at a valuation of $9.5 billion, and Ele.me has since been integrated into Alibaba's local lifestyle business.
Up to now, Alibaba's local life is mainly based on Ele.me's home-delivered business (takeaway, flash sales, etc.) and AutoNavi's in-store business (expanded in-store verification business after the merger of "word of mouth").
Ele.me plus AutoNavi, plus Fliggy, which is in charge of the hotel and tourism business, together is basically what Meituan's local life sector looks like.
Therefore, from a strategic point of view, Alibaba's local life layout is incomplete without any piece.
In addition, Internet companies such as Meituan and JD.com are competing for the instant retail market at this stage. JD.com has JD Daojia and Dada, and Meituan has Meituan Flash Sale, which not only cooperates with supermarkets and convenience stores, but also builds its own flash warehouse.
According to Wang Puzhong, senior vice president of Meituan and president of Daojia Business Group, the scale of the domestic instant retail industry will exceed 500 billion by the end of this year, and the scale is expected to reach 1 trillion yuan in 2026.
Meituan has also recently made a big move in this regard, re-independent Meituan Grocery into a "Little Elephant Supermarket", expanded its SKUs, and not only sold vegetables, but also did "all categories" of instant retail, selling everything.
From the perspective of product form, instant retail can be regarded as a kind of exploration of Meituan's e-commerce business, when a service allows you to buy most of the products you want like ordering takeout, it is in a sense a "very fast delivery e-commerce", Meituan calls this thing "everything to home".
In the same way, in order to prevent Meituan's instant retail business from eroding the demand for e-commerce with high requirements for timeliness, Alibaba should naturally rely on Ele.me's ability to appropriately develop its instant retail business, which is not only to open up new markets, but also to defend the traditional e-commerce market.
In short, from a strategic point of view, it is difficult for Alibaba to give up on Ele.me.
Second, from a business perspective, the probability of Alibaba giving up Ele.me is not large.
In the third quarter of this year, Alibaba's local living income was 15.56 billion yuan, a year-on-year increase of 16%, and the loss continued to decrease. Adjusted EBITA loss for the quarter was $2.56 billion, a decrease of $0.8 billion.
According to the management's previous statement, due to the increase in order volume and unit price, Ele.me's UE (unit economic efficiency) has begun to turn positive since the second quarter of 2022 and has improved.
In other words, Ele.me's business has been losing money for several years, and now it is finally starting to see the dawn of profitability.
In this case, Ali sold Ele.me to Douyin, which is equivalent to letting Douyin pick peaches, and I am afraid that there is no such good thing in the world.
Third, from Douyin's point of view, the main battlefield of local life is the relatively light and high profit margin (gross profit margin of more than 80%) in-store business.
Whether Douyin is determined to earn the hard-earned money of food delivery in person is a question mark.
Previously, in terms of home delivery, on August 19, 2022, Ele.me and Douyin had reached a cooperation, and Ele.me entered Douyin in the form of a Douyin mini-program to provide takeaway delivery services for Douyin users.
In December 2022, Douyin was connected to the three same-city instant delivery platforms of SF Express, Dada, and Flash, achieving an average of 1 hour in the city for group purchase packages.
Due to the lack of dominance in terms of the number of consumers, the number of merchants, and the delivery network, Douyin's Daojia business has not made much progress. According to media reports, Douyin Takeaway has abandoned its goal of GMV of 100 billion yuan for the whole year of 2023.
However, if Douyin chooses to increase its home delivery business, then it is also possible that it will reach equity cooperation with instant delivery platforms such as Ele.me, SF City, and Dada.
Then, perhaps, it is possible for Alibaba to achieve a win-win situation in which Ele.me expands its market share with Douyin traffic and Douyin expands its home business with the help of Ele.me's delivery system.
What is depth? Maybe it's the opening of Ele.me's external financing.
After all, since Alibaba started the reform of the 1+6+N system, Alibaba's overseas e-commerce has begun to prepare for external financing, and Cainiao has also applied for listing on the Hong Kong stock market.
From this point of view, it is not impossible for Ele.me to receive Douyin's investment.
However, the so-called "selling Eleme" as rumored in the market seems to be a bit outrageous.