Rajax's Ele.me acquired Baidu's Waimai

Rajax's Ele.me was announced to have acquired Baidu's Waimai. The food delivery service provider, Ele.me as Rajax's subsidiary has joined the Waimai food and beverage delivery service operated by Xiaodu as a subsidiary of Baidu. The deal is estimated about US$800 million in a combination of cash and equity.

Ele.me is estimated to have a valuation of about US$6 billion, while Waimai is estimated at about US$2.5 billion. The deal means Ele.me has now taken over Waimai and leaving only a small stake for Baidu. Both sides have so far refused to comment.

Merging may be another step in the ongoing battle between two internet giants Alibaba and Tencent. Ele.me is supported by Alibaba's Ant Financial and Koubei service unit, while Tencent supports Meituan Dianping is another major food delivery platform company.

Ele.me continues to grow massively as Uber and Amazon are doubling the business and building the logistics operations division as a growth base. Consumers use a digital platform to buy goods and services wherever anyone can buy a market share.

IResearch internet consultants report online-to-offline market size until the end of 2017 is estimated at 978 billion yuan (US$144 billion) or up 76 percent compared to last year. Ele.me and Waimai each hold 36.5 percent and 17.3 percent market share, while Meituan Dianping is second with 33 percent.

The internet giant sees food delivery as a key starting point in the booming online-services sector and helps them to connect Internet users not only with online vendors, but also offline merchants and service providers.