Alibaba to invest additional 1.44 billion pounds in Lazada, replaces CEO

Jeannie Matthews
March 19, 2018

When it comes to the increased investment, Alibaba said in a recent statement: "The investment underscores Alibaba's 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 Alibaba's global growth strategy", while Lazada founder, Max Bittner who is the newly appointed Senior Advisor, added "Alibaba's new commitment of capital and resources is good for Lazada and good for the Southeast Asia e-commerce market". In 2016, Alibaba acquired control of Lazada with an investment of US$1 billion and boosted its stake to 83 per cent in 2017 with an additional investment of US$1 billion. One of Alibaba's founders, Lucy Peng, will take over as chief executive officer of Lazada. Lazada, for its part, has also been steadily building closer ties with its key investor, offering products from Alibaba's Taobao marketplace across the Southeast Asian region past year, and replacing the leadership of its tech team with Alibaba executives.

She will be tasked with doubling down on Southeast Asia as the region has a young population and high mobile penetration rate, with just 3% of the region's sales now conducted online, the statement read. Former CEO Max Bittner will continue as "senior advisor to Alibaba Group" and, as TechCrunch reports, will be likely involved in future strategy planning, including the platform's expansion into worldwide markets.

Backed by large cash piles and soaring stock prices, Alibaba's new funding in loss-making Lazada underlines an ambitious global push to secure a bigger share of the fast-growing multi-billion dollar e-commerce market. Chinese firm JD.com - the arch rival to Alibaba - has been aggressively pursuing expansion in the region, with CEO Richard Liu pledging to have a presence in every Southeast Asian country by the end of 2018.

Ms Peng, a senior partner at Alibaba and executive chair at Ant Financial (the payments affiliate of Alibaba), said that South-east Asia is a hot spot for growth and exciting opportunities.

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Marketing has reached out to Alibaba for more details.

Launched in 2012, Lazada operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The region's internet economy is expected to grow to $200 billion by 2025, primarily driven by growth in e-commerce.

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