MENU × BUSINESS
Banking And InsuranceCryptocurrencyDigital MarketingErpFood And BeveragesHealthcareLegalMarketing And AdvertisingMedia And EntertainmentMetals And MiningOil And GasRetailTelecom
TECHNOLOGY
Artificial IntelligenceBig DataCloudCyber SecurityE CommerceEducationGaming And VfxIT ServiceMobileNetworkingSAPScience And TechnologySecuritySoftwareStorage
PLATFORM
CiscoDatabaseGoogleIBMJuniperM2MMicrosoftOracleOracleRed Hat
LEADERSHIP
CEO ReviewCompany Review
MAGAZINE
ASIA INDIA
STARTUPS CLIENT SPEAK CONTACT US

The Silicon Review Asia

Alibaba invests $1B into Lazada, a Southeast Asia e-commerce platform

Alibaba invests $1B into Lazada, a Southeast Asia e-commerce platform

Alibaba just took a big step in its Southeast Asian expansion journey. The company recently confirmed that it has pumped a total investment of about $1 billion into Lazada, in a deal that makes it the e-commerce platform’s controlling shareholder. This includes $500 million in newly-issued equity capital, as well as the purchase of existing shares from Lazada shareholders. Lazada is now valued at $1.5 billion, according to Kinnevik, one of its investors.

In separate announcements made at the same time, Lazada shareholders Rocket Internet, Tesco, and Kinnevik each said that they had sold shares to Alibaba as part of the transaction. Rocket Internet (which founded Lazada in 2011) offloaded a 9.1 percent stake for $137 million. Tesco, meanwhile, sold an 8.6 percent stake for $129 million, and Kinnevik parted with a 3.8 percent stake for $57 million. This means each company now owns about half as many Lazada shares as it used to. Rocket Internet said its remaining stake is 8.8 percent, while Tesco still holds 8.3 percent and Kinnevik 3.6 percent.

Rocket Internet created Lazada to build an e-commerce business model that would span major Southeast Asian markets, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. China and India tend to get most of the attention, but Southeast Asia is also one of the most promising e-commerce markets in the world. Lazada has seen strong sales growth there, but it has also experienced high net operating losses as it tries to achieve profitability.

In Indonesia, Lazada is up against rival marketplaces Tokopedia(which is acked by SoftBank and Sequoia) and Matahari Mall. Alibaba’s backing not only gives it a bigger war chest, but may also allow Lazada to take advantage of the Chinese e-commerce giant’s other investments in Southeast Asia, including logistics network SingPost. Southeast Asia and India are Alibaba’s most important international markets as it expands beyond China, but its investments in Southeast Asian companies may take priority (at least for the short term) if the Indian economy continues to slow. In a press statement, Alibaba president Michael Evans said, “With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China, a proven management team and a solid foundation for future growth in one of the most promising regions for e-commerce globally.”

YOU MAY ALSO LIKE

Marketing Partnership: NBA, McDonald’s Will Jointly open NBA Experience Zones India

There is good news for all basketball fans in India. Very soon, NBA themed promotions and experience zones will be launched in India. The announcement...

Dunzo to Raise Funds from Google, others

Dunzo, the app which is trying to make life easier for the people upto some extent plans to raise about Rs. 183 crore from different investors which a...

Sapta Shakti Command Will Be Displaying Defence Technology Equipment at Jaipur Military Station

This event is organised with an aim to provide an opportunity where one and all can experience the developments in the field of defence and security-r...

Samsung is All Set to Roll out Its Galaxy A9 Smartphone On November 20

After Samsung unveiled its new Galaxy A9 smartphone in Singapore last month, the company is all set to launch it in India on November 20. In Singapore...

RECOMMENDED