Alibaba spends another $1b on Lazada to pump up Asian e-commerce business

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Chinese e-commerce giant Alibaba will invest an additional $1 billion into online shopping portal Lazada which operates in six countries in Southeast Asian, namely Thailand, Indonesia, Malaysia, Singapore, Philippines and Vietnam. With the deal, Alibaba will increase its stake from 51 per cent to 83 per cent, the company announced.

The Chinese firm made an initial $1 billion investment in April 2016 at a valuation of Lazada of $1.5 billion, but this second deal raises that valuation to $3.15 billion, it was disclosed. The agreement sees Alibaba buy shares from existing backers Rocket Internet, Singapore’s sovereign fund Temasek and the Lazada management team, the only investors that kept hold of their stock. After the transfer, Temasek will remain the only other investor, holding the balance of 17 per cent.

Alibaba is expected to send Lazada in an e-commerce battle against rivals such as JD.com and Amazon.com in a part of the world that has become the world’s fastest-growing Internet arena, with a populace of more than 600 million getting more comfortable with online shopping and payments.

A particular battleground is seen to be Indonesia, where JD.com has a strong footprint. The country draws comparisons with China a decade ago, with its lack of retail infrastructure, an exploding mobile-user base and a growing middle-class craving leisure and quality goods, which underpinnes the rise of e-commerce as such. That said, JD.com is reportedly in talks to invest hundreds of millions of dollars in Indonesian online marketplace Tokopedia and has plans to set up a delivery network in the country.

Market analysts believe that that e-commerce in Southeast Asia is on track to grow to reach a volume of $88 billion per year in 2025, up from $5.5 billion in 2015, as Internet access becomes more widespread thanks to growing sales of smartphones.

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Chinese e-commerce giant Alibaba will invest an additional $1 billion into online shopping portal Lazada which operates in six countries in Southeast Asian, namely Thailand, Indonesia, Malaysia, Singapore, Philippines and Vietnam. With the deal, Alibaba will increase its stake from 51 per cent to 83 per cent, the company announced. The Chinese firm made an initial $1 billion investment in April 2016 at a valuation of Lazada of $1.5 billion, but this second deal raises that valuation to $3.15 billion, it was disclosed. The agreement sees Alibaba buy shares from existing backers Rocket Internet, Singapore's sovereign fund Temasek and the...

Reading Time: 1 minute

Chinese e-commerce giant Alibaba will invest an additional $1 billion into online shopping portal Lazada which operates in six countries in Southeast Asian, namely Thailand, Indonesia, Malaysia, Singapore, Philippines and Vietnam. With the deal, Alibaba will increase its stake from 51 per cent to 83 per cent, the company announced.

The Chinese firm made an initial $1 billion investment in April 2016 at a valuation of Lazada of $1.5 billion, but this second deal raises that valuation to $3.15 billion, it was disclosed. The agreement sees Alibaba buy shares from existing backers Rocket Internet, Singapore’s sovereign fund Temasek and the Lazada management team, the only investors that kept hold of their stock. After the transfer, Temasek will remain the only other investor, holding the balance of 17 per cent.

Alibaba is expected to send Lazada in an e-commerce battle against rivals such as JD.com and Amazon.com in a part of the world that has become the world’s fastest-growing Internet arena, with a populace of more than 600 million getting more comfortable with online shopping and payments.

A particular battleground is seen to be Indonesia, where JD.com has a strong footprint. The country draws comparisons with China a decade ago, with its lack of retail infrastructure, an exploding mobile-user base and a growing middle-class craving leisure and quality goods, which underpinnes the rise of e-commerce as such. That said, JD.com is reportedly in talks to invest hundreds of millions of dollars in Indonesian online marketplace Tokopedia and has plans to set up a delivery network in the country.

Market analysts believe that that e-commerce in Southeast Asia is on track to grow to reach a volume of $88 billion per year in 2025, up from $5.5 billion in 2015, as Internet access becomes more widespread thanks to growing sales of smartphones.

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