Aibaba Group said Monday it will inject a further $2 billion into Southeast Asian online shopping giant Lazada as part of the group’s ongoing effort to accelerate the region’s e-commerce development.
The latest move will deepen Lazada’s integration into the Alibaba ecosystem and brings Alibaba’s total investment in the e-commerce platform to $4 billion. In 2016, Alibaba acquired control of Lazada with an investment of $1 billion and boosted its stake to 83 percent in 2017 with another investment of $1 billion.
“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,” said Alibaba in a statement.
Lucy Peng, who currently serves as Lazada’s chairwoman, will assume the additional role of chief executive officer. Peng, one of the 18 founders and a senior partner in the Alibaba Group, said the region is a hot spot for growth and exciting opportunities.
“With a young population, high mobile penetration and just three percent of the region’s retail sales currently conducted online, we feel very confident to double down on Southeast Asia,” said Peng. “Lazada is well-positioned for the next phase of development and of Internet-enabled commerce in this region.”
Lazada founder Max Bittner, who has served as the CEO since 2012, will take on the role of senior advisor to Alibaba Group to assist in the transition and future international growth strategy.
“Alibaba’s new commitment of capital and resources is good for Lazada and good for the Southeast Asia e-commerce market,” said Bittner.
Launched in 2012 and headquartered in Singapore, Lazada is the leading online shopping and selling destination in Southeast Asia, with presence in Indonesia, Malaysia, the Philippines, Thailand and Vietnam. The platform now has over 145,000 local and international sellers, as well as 3,000 brands. It also serves more than 560 million consumers throughout the region.
With a population of 650 million people and a fast adaptability to internet, the region represents an immense potential for online retail businesses. According to a report by Google and statement from Singapore investment vehicle Temasek, the region’s internet economy is slated to hit $200 billion by 2025.
In Aug 2017, Alibaba also invested $1.1 billion in Tokopedia, Indonesia’s largest online marketplace.