Alibaba invests extra US$1b in Lazada to expand in Southeast Asia

Alibaba on Wednesday said that it was investing a further estimated US$1 billion to increase its stake in Singapore-based e-commerce platform Lazada to around 83 per cent, as the Chinese e-commerce juggernaut looks to expand its footprint in the Southeast Asian markets.

The investment comes just over a year after Alibaba invested its first US$1 billion in Lazada to gain a controlling stake of 51 per cent last April. The combined US$2 billion pumped into the company is Alibaba’s biggest overseas investment so far.

Both companies have since worked together closely on areas like logistics and payments to facilitate a better experience for Lazada’s Southeast Asian consumers.

The latest deal values Lazada at US$3.15 billion, with Alibaba purchasing the shares of certain Lazada shareholders, according to the Chinese company.

The move comes as Alibaba looks to expand its presence in the growing e-commerce market in Southeast Asia, which boasts a population of over 600 million. Currently, only three per cent of the region’s total retail sales are conducted online, the company said.

In March, Alibaba doubled down on its efforts to lead the e-commerce in Southeast Asia by launching the first Electronic World Trade Platform (eWTP) together with the Malaysian government, allowing Malaysian and Chinese companies to conduct fuss-free, cross-border e-commerce trades.

Malaysia’s eWTP – the brainchild of Alibaba founder Jack Ma – consists of a physical e-fulfilment hub to handle deliveries between the two countries and a corresponding electronic platform that would function as a “digital Silk Road”.