Alibaba group holdings Inc., the Chinese multinational e-commerce and technology magnet, has targeted the Lazada Group by investing a whopping $2 billion as a part of its Southeast Asian expansion scheme.
Founded by Rocket Internet, Lazada group is a privately owned German company. It is known to function in Indonesia, Malaysia, the Philippines, Thailand, Vietnam and Singapore.
Statistically speaking, the current investment of the Chinese mogul in Lazada reaches up to $4 billion. In April 2016, Alibaba had purchased $1 billion stakes, the majority of Lazada shares followed by another $1 billion investment in 2017. In order to enter the Southeast Asian market, Alibaba had decided to buy out a running contender rather than starting afresh.
Spokesperson from the Alibaba Group issued a statement saying, “The investment underscores Alibaba’s confidence in the future success of Lazada’s business and the growth prospect of the Southeast Asian market, a region that is a key part of Alibaba’s global growth strategy.”
The company has taken some quality measures to hand over the charge of this new investment in one of its 18 cofounders, Lucy Peng. She will be taking over the reins from Maximilian Bittner, who will now function as the Senior advisory member at Alibaba.
EY’s Asia-Pacific Fintech regional leader, James Lloyd commented, “It’s a sign of how seriously Alibaba perceive the growth opportunity, and competitive threats, in Southeast Asia. If India was the first key battleground between U.S. and Chinese vertical-leaders, then Southeast Asia is surely the second.”
Since 2013, Alibaba has been experiencing a double digit financial gain. For Lazada users, it has started extending a range of goods from its own Taobao platform.
Consultancy Frost & Sullivan has predicted that the Southeast Asia e-commerce market will rise up to $65.5 billion in 2021 from $20.5 billion last year. The sudden hike in the e-commerce market is due to the active participation of users embracing online shopping.
In 2017, Amazon also entered the Asian market with Prime Now, a same day delivery service express.