Thursday, March 28

Alibaba Invests $2 Billion in Lazada, Also Lead the Operation

Alibaba, China’s leading e-commerce company will appoint one of its founders Lucy Peng as head of Lazada and also invested around $2 billion into Southeast Asia’s leading online shopping firm.

The appointment and funding will use to expand the operations in the south-east Asia region. Alibaba is the leading investor in the Lazada group, owns 83% shares.

Earlier the e-commerce company was invested total $2 billion in two rounds of funding. As per the information, Alibaba with these investments trying to acquire both online and offline assets to further bolster its business.

Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam are the leading market for the e-commerce company having 560 million consumers in the region.

Lazada Group was founded in 2011 by German e-commerce company Rocket Internet.

One of Alibaba’s founders, Lucy Peng, will take over as a chief executive officer of Lazada. Peng is already chairwoman of the Southeast Asia firm.

“With a young population, high mobile penetration and just 3 percent of the region’s retail sales currently conducted online, we feel very confident to double down on Southeast Asia,” Peng said.

Lazada founder Max Bittner said, “Alibaba’s new commitment of capital and resources is good for Lazada and good for the Southeast Asia e-commerce market”.

 

The Reason:

The reasons why Alibaba was interested are South-East Asia market has growing middle-class income populations estimated 190 million people in the region with a disposable income of $16-$100 a day to grow to 400 million people in 2020, Lazada has also figured out how difficult it is in South East Asia, for Alibaba, this helps to save billions by investing from Lazada instead of re-building the e-commerce for this market with the logistics and infrastructure to replicate the China market, and lastly China sellers from Alibaba can also have access to new sellers and buyers from Lazada, this is beneficial to both companies.