Alibaba looks to drive SEA growth with another $2B investment in Lazada

Latest fund injection pushes Alibaba's total investment to US$4 billion since the Chinese e-commerce giant bought a controlling stake in Lazada in 2016 and will see the latter's CEO replaced.
Written by Eileen Yu, Senior Contributing Editor

Alibaba Group has unveiled plans to invest another US$2 billion in Singapore-headquartered e-commerce operator, Lazada Group, as it looks to push forward its expansion plans in Southeast Asia.

The Chinese tech giant added that the new funds also would go towards further integrating Lazada into its ecosystem. The latest move would push Alibaba's total investment to US$4 billion since it purchased a controlling 51 percent stake in Lazada for US$1 billion in April 2016. It later added another US$1 billion in June last year to bump up its stake to 83 percent.

Describing Southeast Asia as "a key part" of its global strategy, Alibaba said in a statement Monday that Lazada's deeper integration into its ecosystem would allow the latter to better support merchants and customers "in innovative ways".

Headquartered in Singapore, Lazada currently has operations in Indonesia, Malaysia, Thailand, Vietnam, and the Philippines, offering more than 260 million items across its online marketplaces.

Alongside the new investment, Alibaba also revealed that Lazada's founder and CEO would be stepping aside and assuming a new role as senior advisor to Alibaba. Current Lazada chairman and one of Alibaba's founding employees, Lucy Peng, would take over as CEO of Lazada.

Peng said in the statement: "With a young population, high mobile penetration and just 3 percent of the region's retail sales currently conducted online, we feel very confident to double down on Southeast Asia. Lazada is well-positioned for the next phase of development of internet-enabled commerce in this region and we are excited about the incredible opportunities for super-charged growth."

Alibaba in March last year announced plans to set up a distribution centre in Malaysia as part of a wider agreement to build up a digital trading network in the country. Anticipated to be ready by end-2019, the facility would serve as a regional e-commerce and logistics hub.

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