After conquering the Chinese consumer Internet with their respective online shopping and social media services, Alibaba and Tencent expand their rivalry to reach more customers to department stores, payment systems and foreign investments. The latest battleground appears to be companies’ domestic food delivery and bike-sharing services markets.
First, Alibaba swallowed China’s biggest food delivery company – Ele.me, in a deal valuing the platform at $9.5 Bn. Ele.me commands almost half of the market, closely followed by Tencent-backed Meituan-Dianping with 43.1 per cent share, according to Analysys International. Two days later, Meituan-Dianping snapped China’s top bike-sharing company – Mobike, and a strong competitor of Alibaba’s ofo.
Deals rationale is intuitive – bringing restaurants, retailers and bike-sharing capabilities into their ecosystems allows the duo to collect more data and promote their payments apps. Moreover, it contributes to companies’ efforts to become a one-stop destination, offering their users a wide spectrum of services and amenities.
SORTIS View: We are intrigued if the trend of service integration will expand abroad or will remain China-specific phenomena.
