Alibaba has acquired food delivery business Ele.me in a bid to further its ambition to move beyond e-commerce.

The deal will see the Chinese marketplace giant take control of one of China’s largest online delivery and services platforms, which is valued at US$9.5bn, taking control of its daily operations and network of delivery drivers.

Alibaba, which already held a 43 per cent stake in the delivery business, hopes that the move will bolster its offline retail infrastructure, furthering founder Jack Ma’s physical retail ambitions, dubbed the New Retail initiative.

Alibaba Group CEO Daniel Zhang said the move into online food delivery will create more value for China’s 1.3 billion consumers.

“Ele.me can leverage Alibaba’s infrastructure in commerce and find new synergies with Alibaba’s diverse businesses to add further momentum to the New Retail initiative,” he said.

In a statement on the deal Alibaba flagged an expansion of Eli.Me’s product horizons beyond its traditional food-focused base, with possible synergies with Alibaba’s existing local services platform Koubei.

It also said it will provide Eli.me with access to its extensive product offering under the New Retail strategy.

Ele.me founder Zhang Xuhao will become chairman of the food delivery business post-acquisition and will be appointed as a special adviser to Alibaba’s CEO on its New Retail strategy.

Alibaba vice president Wang Lei, a company veteran of 15 years, will become the chief executive of Ele.me.

“This acquisition shows that we have built Ele.me into one of China’s most valuable internet businesses. Our customers, merchants and partners will benefit from our further integration into the Alibaba family. We share the same strategic vision that New Retail has a bright future and being part of Alibaba’s ecosystem will take Ele.me’s growth to a new level,” Ele.Me founder Zhang Xuhao said.

UPDATE: This article previously attributed the value of Alibaba’s deal at US$9.5bn, rather than the total value of Ele.me.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.