China’s Alibaba to invest additional US$1b into online retailer Lazada

By LYDIA NATHAN

Alibaba Group Holding Ltd will be investing an additional US$1 billion (RM4.29 billion) into South-East Asia’s online retailer, Lazada Group SA.

The transaction will increase the Chinese e-commerce giant’s investment in Lazada to over US$2 billion overall as it increases its stake from 51% to 83%.

In a statement last week, Lazada CEO Maximilian Bittner said he was looking forward to the renewed partnership with Alibaba.

“I couldn’t be more excited to deepen our relationship with Alibaba. With their support, we will continue to empower brands and sellers to offer a wide selection of unique assortment to consumers across South-East Asia while delivering an exceptional customer experience backed by our best-in-class logistics network,” Bittner said.

Lazada was founded in 2012 in Singapore and has operations in Malaysia, Indonesia, the Philippines, Thailand and Vietnam. In the twelve months ended March 31, 2017, Lazada had about 23 million annual active buyers, according to Alibaba’s annual report.

The joined effort of the two groups has developed a vibrant e-commerce gateway, providing sellers’ access to 560 million customers in the region.

Some of the initiatives taken include the establishment of an e-fulfillment centre in Malaysia, which forms part of Alibaba’s Electronic World Trading Platform (eWTP) strategy, advancing “Thailand4.0”,and the launching of Taobao Collection in Singapore and Malaysia, allowing local customers to shop for high quality products from China.

“Lazada can now invest further in the marketplace, technology, payments and logistics, greatly enhancing its services and providing an unparalleled consumer experience for online shoppers, as well as critical support for the region’s merchants, many of whom are small businesses,” the statement noted.

Alibaba Group CEO Daniel Zhang said Lazada has proved its ability to accomplish and lead the region into growing a strong ecosystem that supports small businesses venturing online, while maintaining consumer experience.

“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 South-East Asia through Lazada to capture these growth opportunities,” Zhang added.

The announcement emerged after reports that China’s JD.com Inc, Alibaba’s primary competitor, announced that it will be injecting US $397million into Farfetch, a market-place for luxury brands, as part of a new strategic partnership.

Waging an impressive public battle for online shoppers, JD.com made impressive gains in the market to become the largest online direct-sales retailer in China.