Reasons why Alibaba might be interested in getting into food delivery service in BD

China-based e-commerce giant Alibaba has allegedly entered negotiation to invest in local online food delivery service HungryNaki. Despite no confirmation from either party, several media has reported of these talks lately. 

According to some industry insiders and venture capitalists, talks are still at the preliminary stage and nothing has been finalised yet. HungryNaki Co-Founder and Deputy CEO Ibrahim Bin Mohiuddin could not be reached for comment over the phone regarding this issue. 

HungryNaki, one of the first few food delivery companies started its operation in 2013. It has been serving more than 500,000 customers across Dhaka, Chittagong, Sylhet, Cox's Bazar, and Narayanganj through its network of over 4,000 restaurants. The startup is also the winner of the Daily Star ICT Award in the best startup of the year category in 2016. 

Technology analysts suggest several reasons why Alibaba might be interested to get into the food delivery game in Bangladesh. In recent years, there has been a surge in foreign investment in local food delivery service. International players such DeliveryHero is investing through Foodpanda while Golden Gate Ventures through Shohoz. The pandemic has surged e-commerce and regular commodity purchasing, making delivery service a lucrative source of investment. 

Previously, Alibaba invested in local mobile financial tech giant bKash and e-commerce platform Daraz. Both companies theoretically give the Chinese giant a strong network and logistics base to further any planned expansion. Both of the ventures have been highly successful in capitalising the demographic dividend of the country. Food delivery, according to some, seems like the plausible next step. 

In China, Alibaba is planning to expand its footprint in the food delivery domain. It also acquired Ele.me in last April, which is now the country's second-largest food delivery company, for $9.5 billion. This flurry of acquisition suggests Alibaba might be planning to go big in food delivery service in the APAC region.