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Alibaba invests $1.25bn in Chinese food delivery company

The e-commerce giant is making sure it does not miss out on China's growing food delivery and online services market.

Alibaba is to take a 27.7 percent share in Chinese online food delivery company Ele.me for $1.25 billion, according to the country’s financial magazine Caixin.

The company name translates roughly as “Hungry?” and allows users to order from local food companies in more than 550 cities. Depending on local availability, that can be anything from fresh produce to a Domino’s pizza.

Consumer interest in booking restaurants and ordering food online has rocketed alongside taxi-booking and similar service apps and websites in China. The competition for successful online services has accordingly risen, as investors seek to consolidate their positions in a young but fast-growing market.

The investment follows Ele’s raise of $350 million from Alibaba rivals Tencent, CITIC Private Equity, Dianping, JD.com and venture capital investment firm Sequoia Capital in January last year.

Chinese search-engine giant Baidu also invested $20 million in a $200 million funding round for Womai in October. The online food retailer is owned by leading agricultural supplier China National Cereals, Oils and Foodstuffs Corp (COFCO). Meituan and Dianping, which offer dining and discount retail offers, also merged at about the same time.