Alibaba Group has acquired all shares in Keruyun, a Beijing-based intelligent catering management solutions provider, as the Chinese e-commerce giant aims to strengthen its business layout in the on-demand local life service market.
Hangzhou-based Alibaba completed the acquisition through a local life service unit, Alibaba Local Life Service, Keruyun said in a WeChat post on Monday.
Financial terms of the transaction were not disclosed. But Chinese online publication All Weather TMT reported in January 2020 that Alibaba Local Life Service paid 800 million yuan ($114 million) to proceed with the deal.
Alibaba Local Life Service was created in October 2018 through the merger of its online food delivery platform Ele.me and local food & lifestyle service Koubei amid increased competition with rival Meituan-Dianping.
The deal will form “an integrated product and service matrix” that combines the offerings of Koubei, Ele.me and its logistics sub-service Fengniao Delivery, as well as the software-as-a-service (SaaS) restaurant management solutions developed by Keruyun, said Keruyun in the post.
The Koubei and Ele.me platforms currently have a combined 245 million annual active users, while Keruyun delivers products and solutions to over 500,000 stores across 102 cities in China.
“We [Alibaba and Keruyun] share an identical goal, which is to help local life service merchants reduce costs and increase revenues,” said Wang Lei, president of Alibaba Local Life Service. “It is an inevitable trend [for players] in the local life service industry to realize the digital reconstruction by combining online and offline operations and upgrading both their software and hardware.”
“The integration of Keruyun into the Alibaba ecosystem will certainly speed up the process,” said Wang.
The addition of Keruyun will also assist Alibaba in achieving “a prioritized target” to help restaurants and other lifestyle-related local merchants reboot their businesses dampened by the spread of the coronavirus, said the company.
The eight-year-old Keruyun primarily provides merchants with one-stop operation and management solutions, software and hardware that cover table reservation, order placement, take-out order tracking, bill payment, capital and personnel management, among others. Its customers include the country’s largest hot pot restaurant chain Haidilao, Singaporean food and beverage brand BreadTalk, and Chinese tea brand RoyalTea.
The company previously raised at least four funding rounds from investors like Sequoia Capital China, Baidu, Chinese investment firm Prime Mont VC, and Beijing-based private equity firm Kaixing Capital.