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Alibaba invests US$1billion in Southeast Asian e-commerce player Lazada

Alibaba Group Holdings will invest another US$1 billion in Southeast Asian e-commerce company Lazada Group, increasing its stake in the company from 51% to approximately 83%.

According to the press statement, Alibaba will buy the shares of certain Lazada shareholders at an implied valuation of US$3.15 billion for Lazada. This move will increase Alibaba’s total investment in Lazada to over US$2 billion. Both Rocket Internet and Kinnevik said in separate press statements that they will be selling their remaining 8.8% and 3.6% stake respectively.

In 2016, Alibaba acquired Rocket Internet’s 9.1% stake in Lazada for US$137million, making it the controlling shareholder of the Southeast Asian online retailer.

Lazada will continue to operate under the same brand following this investment, the press statement indicated. This transaction indicates Lazada’s continued success and Alibaba’s confidence in the growth potential of Southeast Asia. Alibaba’s investment in Lazada plays a crucial role in its global expansion, offering the Chinese e-commerce company with access to consumers in Southeast Asia.

“The e-commerce markets in the region are still relatively untapped, and we see a very positive upward trajectory ahead of us. We will continue to put our resources to work in Southeast Asia through Lazada to capture these growth opportunities,” Daniel Zhang, CEO of Alibaba Group, said.

“With [Alibaba’s] support, we will continue to empower brands and sellers to offer a wide selection of unique assortment to consumers across Southeast Asia while delivering an exceptional customer experience backed by our best-in-class logistics network,” Maximilian Bittner, CEO of Lazada Group, said.

In a statement to Marketing, Bittner said Lazada is leveraging Alibaba’s experience in providing marketing solutions to brands and sellers, to further develop the company as a marketing and education channel for brands and sellers. This is to help them engage with and win over more consumers.

During the past year, both companies partnered on various initiatives to advance e-commerce in Southeast Asia. Earlier this month, Alibaba rolled out Tmall World in Singapore, Malaysia, Hong Kong and Taiwan to allow the 100 million Chinese citizens residing overseas, to purchase items from its retail site Tmall.

It also established an e-fulfillment center in Malaysia which forms part of Alibaba’s Electronic World Trading Platform (eWTP) strategy and advanced “Thailand 4.0” to help Thai SMEs succeed in e-commerce. It also invested an additional SG$$279.1 million into Singapore Post two years ago to to launch three new initiatives for collaboration and growth.

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