Alibaba Group Holdings plans another $2-bn investment in Lazada Group SA
19 March 2018
Alibaba Group Holding Ltd plans another $2 billion worth of investment in privately-owned German e-commerce company Lazada Group SA and have one of its most senior executives run the business as it doubles its bet in Southeast Asia.
According to a statement today, Lucy Peng who is already chairman of Lazada would take over as chief executive officer. Current CEO Max Bittner, who will step down, will continue as senior adviser.
Alibaba is gearing up for an intense battle in Southeast Asia, where Amazon has launched in Singapore-based south east Asia focussed Sea Ltd’s Shopee, and is expanding to win consumers, according to commentators.
The new investment, which follows Alibaba spending $2-billion to take control of Lazada, will help the company with 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, Bloomberg reported.”
According to commentators, Southeast Asia is an important aspect of Alibaba’s global expansion and a thriving region that Chinese archival JD.com Inc is also targeting.
JD CEO Richard Liu has pledged to set up a presence in every Southeast Asian country before the end of the year.
Lazada has operations in Indonesia, Malaysia, the Philippines, Thailand, Vietnam and Singapore.
According to commentators, Southeast Asia is a lucrative market for e-commerce players as millions of first-generation internet users go online for shopping.
Internet economy in the region is projected to grow to $200 billion by 2025, primarily driven by growth in e-commerce.
Amazon entered the market for the first time last year, with the launch of its express, same-day delivery service, Prime Now in Singapore.