Alibaba Announces $2 Billion Investment in Lazada Aimed at Southeast Asian Growth

Alibaba has been moving fast for its regional expansion, the Chinese group has announced another $2 billion investment in Lazada as Singaporean e-commerce giant, this latest investment injection takes Alibaba’s total investment to $4 billion since the company bought stakes in Lazada back in 2016.

Alibaba is focused on Southeast Asian expansion and the company could look no other option other than Lazada to push its expansion plans, Chinese e-commerce giant Alibaba now has plans to inject another $2 billion in Singaporean company which could streamline its growth in the region.

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The funds will be investing in the phase to further integrate Lazada into Alibaba’s ecosystem. Alibaba had invested previously in Lazada back in 2016 which gave it a control of 51 percent of stakes in the company, Alibaba invested $1 billion in April 2016. Alibaba injected another $1 billion in Lazada in June 2017 giving it a control over 83% of stakes.

Technically, the Alibaba group is now the owner of Lazada because the decision making is in its hands. Southeast Asia is a strategic part of Alibaba’s global expansion strategy, the company said it on Monday. “We want Lazada’s deeper integration into our ecosystem in order to better support merchants and customers in innovative ways.” said the company in a statement.

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Lazada is headquartered in Singapore but has a strong presence in Indonesia, Malaysia, Vietnam, Thailand, and the Philippines other than Singapore. The company offers more than 260 million items across its online marketplaces.

Another interesting change Alibaba is to bring is also revealed besides new investment, Lazada’s founder and CEO would be leaving the CEO position and joining Alibaba as the senior advisor while current Lazada’s Chairman and one of the Alibaba’s founding employees, Lucy Peng would get hold of CEO position at Lazada.

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“Young population, increasing mobile penetration and just 3 percent on region’s retail sales are currently online, we see a huge potential in the market and double down South Asia. Lazada is very well positioned in the South Asian market which is ideal for the next phase of development for e-commerce in the region, and we are excited about the incredible opportunities along with super-charged growth ahead,” said Peng in a statement.

Alibaba has already announced its plans to set up a distribution center in Malaysia last year, the platform is expected to be ready and operational by 2019 which would serve as the company’s regional e-commerce and logistics hub.