Alibaba Invests $1B To Increase Stake In Southeast Asian E-Commerce Firm Lazada To 83%

Alibaba Group Holding Ltd. said it plans to invest approximately US$1 billion to increase its stake in Southeast Asian e-commerce platform Lazada to approximately 83% from 51% previously, highlighting the Chinese online shopping giant’s ambition to deepen its global expansion.

Alibaba is to purchase the shares from Lazada’s undisclosed existing shareholders at an implied valuation of US$3.15 billion. The deal reflects a significant increase in the value of Lazada since Alibaba first acquired its majority stake in April 2016, when Alibaba bought a controlling stake in Lazada for approximately US$1 billion.

Since then, Alibaba has been investing in Lazada to build up the firm’s reach and operations. In November 2016, Lazada acquired Singapore-based online grocery shopping site RedMart for a reported price of between US$30 million to US$40 million.

“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,” said Daniel Zhang, CEO of Alibaba Group.

With only 3% of the region’s total retail sales conducted online, Southeast Asia is expected to offer tremendous growth potential. After its investments in Lazada, Alibaba is trying to strengthen its market position in the region with 560 million consumers.

During the past 12 months, Lazada and Alibaba worked on a number of initiatives to advance e-commerce in Southeast Asia, including the establishment of an e-fulfillment center in Malaysia and launching Taobao Collection in Singapore and Malaysia, allowing local customers to shop for products from China.

Lazada operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, helping more than 100,000 local and international sellers as well as 2,500 brands, serving consumers in the region through its marketplace platform.

Source: chinamoneynetwork.com