Alibaba to Invest Additional US$2 Billion in Lazada

Admin@ | May 23, 2018 | 0 | General

Alibaba is poised to make an additional investment of $2 billion (USD) in Lazada, which is around $2.6 billion SGD.  In its official statement, Alibaba Group Holding Limited pledged this investment to provide the much needed fillip to the ecommerce firm in Southeast Asia so it can compete with global marketplaces such as Amazon as they eye substantial expansion across the region.

Alibaba is also planning to assign a top executive to operate Lazada. Lucy Peng, one of the eighteen founders of the behemoth, is going to replace Max Bittner, the founder of Lazada and current chief executive officer. Bittner will don a new role hereafter, that of senior advisor to Alibaba. The additional investment is going to significantly increase the stockholding of Alibaba. It already owns 83% stake totaling around $4 billion now following the infusion of around $2 billion in the last two years. The official statement released by the company states that the investment reiterates the confidence it has in the prospects of Lazada in the near future and its scope of growth across Southeast Asia. The region is significant for the growth of Alibaba as well as it eyes a global expansion.

The funding comes at a time when Lazada is incurring losses. Alibaba has always been rather ambitious with its many ventures and the fresh round of funding does not come as a surprise since it wants to be a market leader in ecommerce well beyond China, Hong Kong and Southeast Asia. Alibaba has no dearth of cash and its stock prices have been soaring for a while now. The ecommerce giant has been making strategic investments and expanding in key related niches. It carried out steadfast developments with Ant Financial, the payment affiliate, and pitted it against competitors JD.com Inc and Amazon Inc. The ecommerce market is reaching a point of stagnancy in China and hence Alibaba is looking beyond to keep fuelling its consistent growth. Southeast Asia has a young and mobile population. Most countries in the region are recording year on year growth. It is only befitting that Alibaba will capitalize on the economic developments and the emergence of a new thriving ecommerce market.

Alibaba is not the only company investing billions in new and old ventures across Southeast Asia. Amazon has been aggressive with its myriad of strategies. It has already developed an extensive infrastructure to support its logistics across the region. The company rolled out a two hour delivery service in Singapore. JD.com in China has developed a captive logistics network for Indonesia and it is also investing in Tiki.vn, a major online retailer in Vietnam. Alibaba has already ventured into India, which is the second biggest ecommerce market in Asia and the biggest new warfront for American and Chinese titans. Alibaba has acquired significant stockholding and despite the sprees of funding they have not brought about any branding changes in India. Having checked on their first priority, the company is now focusing on its second priority which is the ecommerce boom across Southeast Asia. The brand is also expected to invest in fin-tech, datacenters and logistics infrastructure.

About the Author

Morris Edwards is a content writer at CompanyRegistrationinSingapore.com.sg, he writes different topics like Amazon Prime is Gaining Traction in Southeast Asia, Which eCommerce Payment Gateway and Why? and all topics related to Singapore Business and Tech. If you want help on Setting up company in Singapore please contact us or visit our website.

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