Alibaba Raises Stake in Southeast Asia's Lazada

Alibaba Raises Stake in Southeast Asia's Lazada

Alibaba Raises Stake in Southeast Asia's Lazada

The Alibaba Group announced Monday it will invest $2 billion in online retailer Lazada as the company looks to increase its presence in Southeast Asia.

Lucy Peng, a co-founder at Alibaba and now Lazada's chairwoman, would take on the additional role from current chief Maximilian Bittner.

In Aug 2017, Alibaba also invested $1.1 billion in Tokopedia, Indonesia's largest online marketplace. The statement didn't specify how much of the company Alibaba will own after the latest investment.

Meanwhile, Lazada founder Max Bittner - who has served as CEO since 2012 - will take on the role of senior advisor to Alibaba to assist in the transition and future worldwide growth strategy.

In 2016, Alibaba acquired control of Lazada with an investment of US$1 billion and boosted its stake to 83 per cent previous year with an additional investment of another US$1 billion.

The move follows a year of aggressive expansion in Southeast Asia by Alibaba and its payment affiliate Ant Financial, as it faces off against Amazon Inc and fellow Chinese retailer Inc to tap new consumers in the region amid slowing growth in China's e-commerce market. Bittner will remain involved as "senior advisor to Alibaba Group" and apparently involved in future strategy, including further global expansion opportunities.

Launched in 2012, Lazada operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

According to commentators, Southeast Asia is a lucrative market for e-commerce players as millions of first-generation internet users go online for shopping. "With a young population, high mobile penetration and just 3 per cent of the region's retail sales now conducted online, we feel very confident to double down on South-east Asia".

Internet economy in the region is projected to grow to $200 billion by 2025, primarily driven by growth in e-commerce. Both Amazon and Alibaba have long competed for the biggest global market share, with the former commanding United States e-commerce while the latter remains strong in its home turf.

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