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One of the most highly anticipated partnerships between Chinese O2O services could see a full rollout before the year’s end, with Didi Dache and Ele.me reportedly settling on partnership plans this week.
Ele.me CEO Zhang Xuhao confirmed to Chinese press that the two companies had reached an agreement on a “strategic program” between the two companies, though no financial details have yet been released.
Ele.me is China’s leading O2O food delivery service. Founded in 2009, the Shanghai-based company employs a wide network of two-wheel delivery drivers in partnership with restaurants all over China to provide on-demand food delivery through their namesake app ‘Ele.me’, Which in Chinese translates to ‘Hungry?’. Didi is the country’s largest ride-hailing service and is valued at over $16 billion USD.
In September Zhu Xiaohu, Director at GSR Ventures, the company that backed Ele.me’s A series, confirmed that the companies were pursuing a strategic relationship, but that they had yet to enter formal financial discussions. At the time Didi noted that the partnership in discussion would not involve any direct investment.
The latest plans involve a program that utilizes both two-wheeled and four-wheeled distribution systems for food delivery. The same source said that a trial has begun in Beijing, which will extend to a fully-fledged service before the end of December.
A partnership between Ele.me and Tencent has long been rumored, considering both companies exist within Tencent’s strategic investment ecosystem. Both companies are well-and-truly equipped with enough capital to pilot the cooperative project, Ele.me closed a $630 million USD funding round in August, on top of a $350 million USD E round in January led by Tencent. Didi nabbed a whopping $3 billion USD investment over the summer, fueling their fight for market share against Uber and a handful of other ride-hailing companies.
The program resembles ‘UberEATs’, the food delivery service run by Uber. Uber has also been expanding aggressively in China since establishing an independent China operation to take on Didi. However despite offering periodic promotional food services, they are yet to launch an UberEATS style service on the mainland.