Alibaba to invest another RM7.8b in Lazada

by BLOOMBERG

HONG KONGAlibaba Group Holding Ltd will invest another US$2 billion (RM7.84 billion) in Lazada Group SA and instal one of its most senior executives to run the business as it doubles its bet on South-East Asia.

Lucy Peng, who is already chairman of Lazada, will take over as CEO, according to a statement yesterday. Current CEO Max Bittner will step down and remain as a senior advisor.

Alibaba is gearing up for an intense battle in SouthEast Asia, where Amazon.com Inc has launched in Singapore and Sea Ltd’s Shopee is expanding to win consumers. The new investment, which comes after Alibaba spent about US$2 billion buying control of Lazada, gives the cash burning business much needed ammunition for technology development and customer acquisition.

“This is part of its overseas expansion strategy, where it’s using a specific platform as a testing ground,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Now it’s going to run operations itself.”

South-East Asia is an important aspect of Alibaba’s global expansion and a thriving region that Chinese archfoe JD.com Inc is also targeting. JD.com CEO Richard Liu has pledged to be in every South-East Asian country before the end of the year.

Alibaba paid US$1 billion for a stake in Lazada in 2016 before putting another US$1 billion in last year to increase its holding to 83%. The company declined to say how its stake will change with the latest investment.