Hong Kong: Alibaba Group Holding Ltd has agreed to buy the shares of food delivery startup Ele.me it doesn’t already own to boost its last mile delivery network, a person familiar with the matter said.

The e-commerce giant, which owned 23% of Ele.me as of May, plans to buy the stock from investors including Baidu Inc., the person said, requesting not to be named because the matter is private.

Ele.me was valued between $5.5 billion to $6 billion in its fundraising in May last year, people familiar said at the time. Ele.me bought Baidu’s delivery business at a $500 million valuation in August 2017, a person familiar said at the time.

Alibaba is competing with Tencent Holdings Ltd.-backed Meituan Dianping for China’s food delivery and neighbourhood services business. Last mile delivery—an Ele.me stronghold—is what Alibaba could leverage, if it consolidates the business with its own Koubei platform. The company is also expanding its own grocery store line under the brand HeMa, that’s a grocery, restaurant and fulfilment centre rolled into one.

Alibaba and Baidu declined to comment while Ele.me didn’t immediately respond to a request for comment. Bloomberg