Alibaba is in discussions to acquire Chinese on-demand fresh-grocery delivery platform Pupu in a deal reportedly worth $1.5bn.
A Nikkei Asia source familiar with Pupu confirmed that talks with Alibaba are under way, but the platform is under no pressure to conclude a deal given its current financial health.
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A separate source close to Alibaba also confirmed the negotiations and noted that rival bidders are involved, without naming them or disclosing bid figures.
JD.com and Meituan told Nikkei Asia they are not parties to any offer.
Alibaba’s bid worth $1.5bn was reported by Bloomberg last week.
If the reported figure of more than $1bn proves accurate, the deal would surpass Meituan’s $717m purchase of on-demand grocery platform Dingdong Maicai in February.
Established in 2016, Pupu operates solely online and promises delivery within 30 minutes.
Its operations are concentrated in southern China, primarily in Fuzhou and Shenzhen.
The company runs a direct-sales model centred on fresh produce, using fulfilment centres that are reportedly around three times the size of the industry average, housed in lower-cost locations.
It also covers household and daily essentials and has cultivated a regional customer base through localised promotional activity.
A source close to the company told the publication that Pupu’s strengths — spanning logistics infrastructure, supply chain maturity, merchandising algorithms, and operational efficiency — would be difficult for competitors to replicate.
Alibaba’s existing grocery unit, Freshippo, is oriented towards physical retail and higher-income urban shoppers in prime locations, with online delivery times longer than those offered by Pupu.
Rival Meituan’s Xiaoxiang Supermarket, which was rebranded in 2023 from a fresh grocery service into a broader online supermarket, now runs more than 1,000 local warehouses across upwards of 50 cities, also on a 30-minute delivery model.
The prospective acquisition comes amid tightening regulatory oversight of China’s platform economy.
Beijing’s market regulator recently called in five companies — Alibaba’s Taobao, ByteDance’s Douyin, JD.com, Pinduoduo, and Xiaohongshu — over concerns that so-called “ten-billion-yuan subsidy” promotions may overstate their advertised value and mislead consumers.
Pupu has completed five funding rounds, with backers such as IDG Capital, according to Chinese business registration platform Tianyancha cited in the Nikkei Asia report.
