Koubei

About Koubei

Koubei, whose name translates to "Word of Mouth" in Chinese, operates as a comprehensive local services platform and a key component of Alibaba's ecosystem. Initially founded in 2004 by Zhiguo Li, the platform was envisioned as a search engine and classifieds site for local consumer services. Alibaba made an early strategic investment in 2006, recognizing the potential of community-based online marketplaces. A significant milestone occurred in 2015 when Alibaba and its affiliate, Ant Financial, jointly invested nearly $1 billion to relaunch Koubei as a major online-to-offline (O2O) venture, each holding a 50% stake. This strategic move was aimed at capturing China's rapidly growing local services market, with an initial focus on the food and beverage industry.

The platform serves as a digital conduit for brick-and-mortar businesses, providing them with mobile solutions to connect with the vast Chinese consumer base. Its primary clients are local merchants, ranging from restaurants and spas to pharmacies and retail stores. Koubei's business model is centered on providing an integrated application where users can discover local merchants, place orders, make payments via Alipay, and post reviews. This creates an ecosystem that supports merchants with tools for marketing, customer management, online reservations, and delivery. Revenue is generated through its various services to merchants, and it leverages the vast user base of other Alibaba platforms like Alipay to drive traffic and transactions.

Koubei's core service is a platform that digitalizes the operations of local businesses. For consumers, it is an application to find deals and services for restaurants, gyms, and more. For merchants, it offers a suite of tools under the "Alibaba Local Services Operating System," which includes in-store digitization, supply-chain management, and digital membership card programs to foster customer loyalty. A key feature is its integration with Alipay, which facilitates seamless payments. In a strategic move to intensify its competition with rivals like Meituan, Alibaba merged Koubei with the on-demand delivery service Ele.me in 2018, creating a unified local services company. While the two brands continue to operate distinctly, their collaboration allows for a more comprehensive service offering, combining Koubei's merchant platform with Ele.me's robust delivery network.