Alibaba Group Holding will invest another US$2 billion in Southeast Asian e-commerce platform Lazada and install one of its most senior executives to run the business.
This will double the Chinese giant’s investment in Lazada. Alibaba had made an initial $1 billion investment in April 2016, adding another $1 billion in June last year. Its stake is now estimated at 83 per cent.
Lazada’s minority shareholders, including the e-commerce firm’s management and Singapore’s Temasek Holdings that jointly held a 17 per cent equity stake before this financing round, have not left the venture but have had their shareholding significantly diluted.
“The investment underscores our confidence in the future success of Lazada’s business and the growth prospect of the Southeast Asian market, a region that is a key part of our global growth strategy,” says Alibaba.
Meanwhile, it has named Lucy Peng, Lazada’s chairwoman, as the Singapore-headquartered firm’s new CEO. She is one of the 18 founders and a senior partner in the Alibaba Group.
“With a young population and high mobile penetration… we feel very confident to double down on Southeast Asia,” says Peng. Lazada founder Max Bittner, who has served as CEO since 2012, will take on the role of senior advisor to Alibaba.
“Alibaba’s new commitment of capital and resources is good for Lazada and good for the Southeast Asia e-commerce market,” says Bittner. Alibaba’s other mega deals in Southeast Asia include leading a $1.1 billion funding round in Indonesia’s Tokopedia last year.
Alibaba’s rival JD.com formed a $500 million e-commerce venture with Thai retailer Central Group last year and has just invested in Vietnam’s e-commerce startup Tiki.vn.
A Google-Temasek report has found that Southeast Asians spend more time on mobile internet than anyone else on the planet, and spend twice as much time as Americans on e-commerce sites.