58 Home, the on-demand service subsidiary of Chinese classifieds giant 58.com (NYSE: WUBA), announced on Monday that its freight business unit 58 Suyun has entered into a merger with Hong Kong startup GOGOVAN. Once rivals in the space, the two companies will combine to become the largest intra-city logistics and freight online platform in Asia, according to a statement by 58 Home.

58 Home will hold a majority stake in the combined company, which will continue to be branded as 58 Suyun in China and GOGOVAN outside of China. Their customers, both merchants and consumers, use the apps to move any goods—from furniture, a restaurant’s vegetable procurement, or hotel items. The apps then distribute the orders to a network of truck drivers based on location data. To date, 58 Suyun has a presence in more than 100 Chinese cities with over one million registered drivers. GOGOVAN has expanded to 14 cities across six Asian countries and regions with 180,000 registered drivers.

The GOGOVAN merger will post an immediate threat to Lalamove, the Hong Kong-based startup present in 50 cities in China and five cities across Southeast Asia with 500,000 drivers on its platform. In January, Lalamove closed a $30 million Series B, targeting an expansion to 60 more cities in China and Asia by the end of 2017.

The merger is reminiscent of 58.com’s acquisition of its arch-rival Ganji.com back in 2015, ending a decade-long battle between two of China’s biggest classified sites. 58 Home, with its exhaustive list of O2O services, face an army of competitors ranging from on-demand housekeeping to car washing platforms. But the company has brought a lot of ammo, as it set aside $1.5 billion in investment for 100 startups that could boost its O2O businesses.

The parent company 58.com achieved unicorn status in 2015 after a $300 million equity funding round from a group led by Alibaba, Ping An Insurance (Group) and private equity firm KKR. Tencent also has a stake in 58.com.

Telling the uncommon China stories through tech. I can be reached at ritacyliao [at] gmail [dot] com.

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