The Alibaba Group announced it will invest nearly USD 1.0 billion to increase its stake in Lazada Group, the leading e-commerce platform in Southeast Asia, from 51 per cent to approximately 83 per cent. Alibaba said the transaction demonstrates the continued success of Lazada’s business, and the Chinese e-commerce giant’s confidence in the growth potential of the Southeast Asian markets and its commitment to the region as part of its global strategy.
Alibaba will purchase the shares of certain Lazada shareholders at an implied valuation of USD 3.15 billion for the company, reflecting a significant increase in the value of Lazada since Alibaba first acquired its majority stake in April 2016. The transaction will increase Alibaba’s total investment – first initiated in April 2016 – in Lazada to over USD 2.0 billion. Lazada will continue to operate under the same brand following this investment.
Alibaba’s investment in and collaboration with Lazada have been an important part of expanding Alibaba’s global footprint, providing it with unrivalled access to consumers in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. With only 3.0 per cent of the region’s total retail sales conducted online, Southeast Asia is expected to offer tremendous growth potential.
With Alibaba’s scale, e-commerce know-how and technology expertise supporting the execution of Lazada’s management team, the two businesses have successfully developed a vibrant e-commerce gateway, giving brands and sellers access to the 560 million consumers in the region, the company said. The cooperation has also enabled Lazada to invest further in the marketplace, technology, payments and logistics, greatly enhancing its services and providing an unparalleled consumer experience for online shoppers, as well as critical support for the region’s merchants, many of whom are small businesses.
“As a market leader, Lazada has demonstrated its ability to execute and further lead the region in products and services with the best consumer experience in Southeast Asia while growing a strong ecosystem that supports small businesses going online,” said Daniel Zhang, CEO of Alibaba Group. “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,” he added.
Maximilian Bittner, CEO of Lazada Group, said: “I couldn’t be more excited to deepen our relationship with Alibaba. With their support, we will continue to empower brands and sellers to offer a wide selection of unique assortment to consumers across Southeast Asia while delivering an exceptional customer experience backed by our best-in-class logistics network.”
During the past 12 months, both Lazada and Alibaba worked on a number of initiatives to advance e-commerce in Southeast Asia, endeavoring to lower barriers and facilitate borderless commerce. These initiatives include the establishment of an e-fulfillment centre in Malaysia which forms part of Alibaba’s Electronic World Trading Platform (eWTP) strategy, advancing ‘Thailand 4.0’ and launching Taobao Collection in Singapore and Malaysia allowing local customers to shop for high quality products from China.