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Prepared for delvery by China's Ele.me. Photo: AFP / Getty Images

With its $9.5 billion takeover offer this week for Chinese food-delivery juggernaut Ele.me, Alibaba is pushing ahead with a massive advance into physical retail, a trend that U.S. rivals are only starting to follow.

Why it matters: Alibaba's offer for Ele.me fits into its "New Retail" initiative, shaping the future of retail on a scale that makes it Amazon's true global competition.

The background: Alibaba is often compared with Amazon — its revenue is far smaller ($23 billion in its fiscal year ending March 2017, compared with Amazon's $178 billion for all of 2017) — but it serves many more customers; Alibaba's estimated user base is about 550 million in China alone. While that number grows, Alibaba is migrating into the 80% of shopping done in physical stores.

  • The company runs an upscale grocery chain called Hema, and bought 36% of Sun Arts Retail, the largest supermarket operator in China.
  • It previously invested $4.6 billion in Suning Commerce, China's leading electronics retailer, and bought the department store chain Intime.
  • By comparison, Amazon — with its purchase of Whole Foods and launch of AmazonBooks — seems to be lagging.

Alibaba already owns 60% of Ele.me, the food delivery company, which operates in about 2,000 Chinese cities. Deepashri Varadharajan of CB Insights tells Axios that, if the buyout of the remaining shares is finalized, Alibaba will have an effective monopoly on Chinese food delivery, part of an exploding global industry estimated at more than $100 billon a year in sales.

The bottom line: The Ele.me acquisition is part of Alibaba's massive horizontal integration of sectors that marry on-line and far-more-dominant physical shopping. Varadharajan says the tie-up is circular with the rest of Alibaba. "Alibaba established a symbiotic relationship with Ele.me where users can tap into Ele.me’s services using the Alipay app," she said.

Go deeper

Updated 3 hours ago - World

In photos: Pope Francis spreads message of peace on first trip to Iraq

Pope Francis waving as he arrives near the ruins of the Syriac Catholic Church of the Immaculate Conception (al-Tahira-l-Kubra), in the old city of Iraq's northern Mosul on March 7. Photo: Vincenzo Pinto/AFP via Getty Images

Pope Francis was on Sunday visiting areas of northern Iraq once held by Islamic State militants.

Why it matters: This is the first-ever papal trip to Iraq. The purpose of Francis' four-day visit is largely intended to reassure the country's Christian minority, who were violently persecuted by ISIS, which controlled the region from 2014-2017.

Cuomo faces fresh misconduct allegations from former aides

New York Gov. Andrew Cuomo during a February press conference in New York City. Photo: Seth Wenig/Pool/AFP via Getty Images

The office of New York Gov. Andrew Cuomo (D) was on Saturday facing fresh accusations of misconduct against his staff, including further allegations of inappropriate behavior against two more women. His office denies the claims.

Driving the news: The Washington Post reported Cuomo allegedly embraced an aide when he led the U.S. Department of Housing and Urban Development and that two male staffers who worked for him in the governor's office accused him of routinely berating them "with explicit language."

In photos: Protesters rally for George Floyd ahead of Derek Chauvin's trial

Chaz Neal, a Redwing community activist, outside the Minnesota Governor's residence during a protest in support of George Floyd in St.Paul, Minnesota, on March 6. Photo: Kerem Yucel/AFP via Getty Images

Dozens of protesters were rallying outside the Minnesota governor's mansion in St Paul Saturday, urging justice for George Floyd ahead of former Minneapolis police officer Derek Chauvin's trial over the 46-year-old's death.

The big picture: Chauvin faces charges for second-degree murder and manslaughter over Floyd's death last May, which ignited massive nationwide and global protests against racism and for police reform. His trial is due to start this Monday, with jury selection procedures.