Following its acquisition this year of eCommerce firm Lazada, the Alibaba Group is set to further extend its footprint in Southeast Asia with a possible buyout of Singapore grocery delivery serviceRedmart.
Lazada is in advanced discussions for a buyout priced between $30 and $40 million, though Redmart is said to prefer an investment, reports TechCrunch.
Founded in 2011, the company has raised $55 million in equity financing to date and was a first mover in the e-grocery space in Southeast Asia. However, reports Deal Street Asia, it has faced financing issues over the past 12 months. Its last funding round in 2014 raised $23 million from investors including SoftBank and San Franciso-based Visionnaire Ventures.
A sellout would enable Redmart to expand regionally through Lazada’s infrastructure and networks. This aligns with Alibaba’s plans to expand into Southeast Asia, particularly Indonesia, Malaysia, the Philippines and Thailand.
Indonesia’s economy is the largest in Southeast Asia. It is one of the world’s largest emerging markets, with its GDP forecast to grow at 5 per cent a year until 2020.
Meanwhile, Tech in Asia says Redmart has been reporting losses, but with revenues growing since 2013 – $9.6 million in 2014 and $27 million last year – Redmart projects self-sustainability by the middle of next year.
Competitors like HappyFresh, which raised more than $20 million from investors, has withdraw its service from two Southeast Asian markets, while HonestBee, which raised $15 million last year, is active in four cities.