Chinese Internet giant Alibaba has bought Pakistani e-commerce firm Daraz in an undisclosed deal in order to expand its operations in South Asia. The deal marks Alibaba’s second wave of international expansion aiming to enter South Asia.
Daraz was founded in 2012 and is backed by European Tech Incubator Rocket Internet. It operates in Bangladesh, Myanmar, Sri Lanka, Nepal and Pakistan. This is the second time when Alibaba has bought a Rocket company, the first being Lazada in South East Asia in 2016.
The official announcement for the deal is awaited but has been confirmed by a company spokesperson, according to the sources.
Alibaba had initially focused on India backed by Paytm but now it aims to spread its wings into lower profiles which are hugely populated in South Asia. Pakistan, in particular, has a whopping population of over 190 million and ranks 4 in the list of most populated countries in Asia. The acquisition from Daraz has also followed a fintech investment from Ant Financial, an Alibaba’s affiliate that runs Alipay and other Alibaba financial services.
Earlier in March this year, Ant Financial had acquired 45 percent stakes for $184.5 million in the Telenor operated fintech firm, Telenor Microfinance Bank which operates Pakistan’s second largest telecom industry. The amalgamation of e-commerce and fintech is a common move for Alibaba-Ant, which has made similar deals in India and across Southeast Asia.
In addition to Pakistan, Alibaba is also eyeing its market in Bangladesh, a country with 160 million population and rising internet adoption.
Additionally, a prominent report published last month revealed that the Chinese firm is actively looking forward to buying 20 percent stakes of payment firm bKash thus hitting a move that would further boost its presence and hold in South Asia.