China’s two leading food delivery platforms have a strong rivalry that runs deeper than the natural competition between two companies going after the same market.
On Wednesday an Ele.me PR spokesperson posted a WeChat Moment apologizing to Meituan over false advertising and uncompetitive practices and calling for peace and fair competition across all parties, but not before alleging Meituan of pushing merchants to choose between one of the two platforms. Ele.me’s apology also appeared on its website.
This peace offer, however, was legally mandated as part of a case it lost against Meituan. The Alibaba-owned Ele.me was sued by Meituan in 2016 for illegally collaborating with merchants to offer discounts that unfairly undercut Meituan’s business. However, Meituan is now itself under investigation for forcing restaurants to side between it or Ele.me.
Besides Alibaba’s elbowing into in Meituan’s traditional stronghold of local services and delivery when it acquired Ele.me in 2018 and merged with its other food delivery unit Koubei and fresh produce market Hema Fresh, the two companies have some bitter history: The e-commerce titan was an early backer of Meituan, then in 2015 the latter closed a USD 1 billion funding round with Alibaba archrival Tencent without consulting Alibaba about the deal.
Update May 23: The story was edited to clarify that Ele.me was forced to apologize and that its apology also appeared on its website, not just as a WeChat moments post.
Editor: Nadine Freischlad