It said the takeover puts Ele.me's value at $9.5 billion. Alibaba did not say how much it was paying for the remaining stake.
Ele.me, which means "Are you hungry?", said it operated in 2,000 Chinese cities and had 260 million users as of mid-2017, employing an army of three million scooter-borne delivery drivers.
The statement by Alibaba, an e-commerce leader through its hugely popular Taobao online shopping platform, implied that it would expand Ele.me's delivery business beyond mere meals.
"Ele.me's fast local delivery service will build on its core expertise in food delivery to provide consumers with a wider range of products and services on demand," Alibaba said.
"This expansion of offerings will allow Ele.me to efficiently utilise its large delivery force that currently fulfils orders in cities across China."
Ele.me has been competing fiercely with its main rival Meituan, which is backed by Tencent, the Chinese social media, messaging and online payments heavyweight.
Users of meal-ordering platforms tripled in two years to 343 million in 2017, the China Internet Network Information Center said. The vast majority use mobile apps.
Alibaba has been trying to integrate its online e-commerce services with offline bricks-and-mortar services to ensure growth momentum.