Alibaba’s invests $845 Million in Lazada

Alibaba has infused an additional sum of USD 845.44 million into Lazada, as reported in a filing by Tech in Asia. The funding is expected to help Lazada support local merchants, equipping them to navigate the intensifying rivalry in the local market. 

As per calculations, this latest funding brings the Chinese tech giant’s total investment in Lazada to nearly US$6 billion since it acquired a controlling stake in the company in 2016, with a major US$1 billion investment then.

Lazada’s affiliation with Alibaba’s Global Digital Business Group, alongside AliExpress, Trendyol, and Daraz, helps the startup to grow a network of prominent e-commerce platforms under Alibaba’s umbrella. 

The recent reorganization of Alibaba into six business units, including Lazada’s placement under the International Digital Business Group, is a strategic move aimed at increasing agility and autonomy, potentially paving the way for Lazada’s future Initial Public Offering (IPO).

Industry analysts have highlighted the potential benefits of this decentralization, indicating that it could grant Lazada the flexibility to make faster and more localized decisions, catering to the diverse and rapidly evolving markets in Southeast Asia. 

An IPO for Lazada could offer access to additional funding, unlocking further growth opportunities and enabling the platform to expand its services and market reach. 

As per a recent report by venture builder Momentum Works, Lazada held the second position among Southeast Asia’s e-commerce platforms in gross merchandise value (GMV) last year, reaching an impressive US$20.1 billion. Topping the chart was Shopee, securing the first spot with a GMV of US$47.9 billion. 

Despite their significant market presence, both Lazada and Shopee are now facing increased competition from emerging players like TikTok Shop. TikTok’s CEO, Shou Zi Chew, has announced substantial investment plans in Southeast Asia, recognizing the region’s rapid growth potential. 

Alibaba is considering conducting a US initial public offering (IPO) for its international e-commerce division. This move comes as the Chinese tech giant is already preparing to list its cloud computing, logistics, and retail units as separate entities. The potential US IPO could mark a significant step for Alibaba as it aims to enhance the visibility and financial performance of its international e-commerce business.

The Chinese government has recently shown indications of easing regulations on local tech giants, recognizing the need to address concerns related to market dominance. As a result, Alibaba is eyeing various strategic measures to navigate the evolving regulatory landscape and strengthen its position in both domestic and international markets. 

An international e-commerce IPO could unlock new opportunities for Alibaba’s global expansion, allowing it to leverage its market expertise and capitalize on the growing demand for e-commerce services worldwide.