Alibaba Group Holding Limited (BABA) is saying goodbye to Ele.me, the food delivery brand it's operated for 16 years. The retirement became official on Friday as Alibaba folded the service completely into its instant-retail strategy, a defensive move in China's increasingly brutal delivery market.
If you're an Ele.me user in China and you update your app, you'll notice something different: it's now called "Taobao Shangou." The standalone brand is gone. Instead, food delivery is being absorbed into Alibaba's broader Taobao marketplace as part of what the company calls its instant-retail strategy. Over the coming weeks, every reference to Ele.me will disappear from user interfaces across the platform, according to Caixin Global.
This isn't Alibaba's first consolidation move this year. Earlier in 2025, the company folded both Ele.me and its online travel agency Fliggy into its core e-commerce operations. The reason? Fierce domestic competition that's only getting more intense.
The Competitive Squeeze
Alibaba is feeling pressure from multiple directions. Meituan (MPNGY) and JD.com Inc. (JD) are both expanding their food-delivery services aggressively, forcing Alibaba to strengthen its logistics network and roll out faster delivery features on Taobao. When your rivals are gaining ground, you either evolve or get left behind.
The company's response is to unify everything. For the first time in years, Alibaba is coordinating Taobao, Tmall, Alipay, Ele.me, Freshippo, Fliggy, and Alibaba Cloud as a single operational force. That includes creating a unified fleet of delivery workers and rolling out a consolidated membership program that ties together shopping, food delivery, and travel. The goal is simple: keep customers locked into the Alibaba ecosystem so they don't wander over to Meituan.
Strategic Centralization Under CEO Jiang Fan
This consolidation represents a major strategic pivot for Alibaba. The company originally planned to break itself into separate units, but it abandoned that approach in favor of centralization under CEO Jiang Fan. The decision came as Alibaba faced mounting competitive pressure and increased regulatory scrutiny.
Alibaba, Meituan, and JD.com have all publicly pledged to avoid destructive price wars. But let's be real—competition remains fierce. Months of deep discounts have already reshaped the market, and nobody's backing down.
Growth Drivers and Analyst Concerns
So what's driving Alibaba forward despite these challenges? The company is leaning heavily on aggressive promotions, stronger e-commerce momentum, and rising demand for its AI models. But analysts aren't entirely optimistic—many are warning of heavy future losses at Ele.me as the delivery wars continue.
Still, the $376 billion Chinese tech giant has seen its stock surge 86% year-to-date, powered primarily by its cloud unit and artificial intelligence models. Investors seem to be betting that Alibaba's AI boom will offset struggles in other areas.
BABA Price Action: Alibaba shares were up 0.99% at $159.00 during premarket trading on Friday, according to market data.
