SHANGHAI (Reuters) - Alibaba Group Holding Ltd (>> Alibaba Group Holding Ltd) has agreed to invest $1.25 billion (837 million pounds) in Chinese online food delivery service Ele.me, leading business weekly Caixin reported on Friday.

The report, citing unidentified sources, said Alibaba will obtain a 27.7 percent stake in Ele.me, becoming its biggest shareholder.

Officials at Alibaba could not be immediately reached for comment.

Ele.me, which roughly translates as 'Hungry Now?', is part of a trend in China for what is known as online-to-offline (O2O) services. These include taxi hailing and restaurant review apps that link smartphone users with offline businesses.

Earlier this year, the food delivery service firm raised $350 million from investors including CITIC Private Equity, Tencent Holdings Ltd (>> Tencent Holdings Ltd), Alibaba rival JD.com Inc (>> JD.Com Inc(ADR)), Dianping and Sequoia Capital.

As more Chinese use their phones for everything from shopping to booking restaurants, China's internet giants Alibaba, Tencent and Baidu Inc (>> Baidu Inc (ADR)) are increasingly investing in these services to attract more users to their own platforms.

Alibaba, the world's biggest e-commerce company, and social networking and video games titan Tencent together spent more than $8 billion last year alone backing sometimes strikingly similar ventures, such as taxi hailing apps Kuadi Dache and Didi Dache.

(Reporting by Kazunori Takada; Editing by Shri Navaratnam)