Alibaba Spends $1 Billion To Boost Its Stake In Lazada

Alibaba Group, China’s eCommerce giant, is set to spend $1 billion to increase its stake in Lazada Group, an eCommerce company based in Southeast Asia.

In a press release, Alibaba said the new investment brings its stake in Lazada from 51 percent to 83 percent. The eCommerce giant is purchasing the shares from certain Lazada shareholders at an implied valuation of $3.15 billion. That, Alibaba said, is a “significant increase” in the value of Lazada, the highest since Alibaba first acquired a majority position in April of 2016.

“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, in a press release. “The eCommerce 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.”

With the new $1 billion, Alibaba has invested a total of $2 billion in Lazada Group in an effort to expand outside the Chinese market. Southeast Asia is viewed as the next battlefield for eCommerce with, Alibaba’s already-in-the-market Chinese rival, and Amazon reportedly gearing up to enter it. The region has one of the fastest growing internet usage rates and a population of more than 600 million people, most of whom are increasingly comfortable with eCommerce and making digital payments.

Lazada has been launching new features to counter Amazon in case it enters the Southeast Asia eCommerce market. In the spring it partnered with Uber and Netflix to create an online rewards program for users in Singapore.


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