Alibaba Group’s share in Lazada boosted to 83 per cent

Alibaba Group’s share in Lazada has reached about 83 per cent after the e-commerce giant bought out all but one other investor.

Alibaba Group said Wednesday it would spend about US$1 billion lifting its stake from the current 51 per cent, which values the company at $3.15 billion – a “significant increase” in Lazada’s value from when Alibaba took a majority stake in April 2016.

Lazada has been a key element of Alibaba’s expansion of its global footprint. The two have collaborated over the past year, giving them unrivalled access to the approximately 560 million consumers in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. And yet, with only 3 per cent of the region’s total retail sales done online, Southeast Asia remains a hotspot for growth.

“As a market leader, Lazada has demonstrated its ability to execute and further lead the region in products and services with the best consumer experience in Southeast Asia while growing a strong ecosystem that supports small businesses going online,” said Daniel Zhang, CEO of Alibaba Group. “The e-commerce markets in the region are still relatively untapped, and we see a very positive upward trajectory ahead of us.

We will continue to put our resources to work in Southeast Asia through Lazada to capture these growth opportunities.”

Alibaba has so far provided scale, e-commerce know-how and technological expertise to allow Lazada to invest further in the marketplace, technology, payments and logistics, enhancing its services and the customer experience. Lazada has also focused on supporting the region’s merchants, many of whom are small businesses.

Specifically, Lazada and Alibaba have established an e-fulfillment center in Malaysia as part of Alibaba’s Electronic World Trading Platform, advancing “Thailand 4.0” and launching Taobao Collection in Singapore and Malaysia, giving local customers access to high-quality products from China.

“I couldn’t be more excited to deepen our relationship with Alibaba,” said Maximilian Bittner, CEO of Lazada Group. “With their support, we will continue to empower brands and sellers to offer a wide selection of unique assortment to consumers across Southeast Asia while delivering an exceptional customer experience backed by our best-in-class logistics network.”

Deal Street Asia reports all the remaining shareholders in Lazada except Singapore state investment fund Temasek Holdings, have chosen to exit the platform.

This development comes as Indonesia’s largest online marketplace Tokopedia, expected to launch in Thailand this year, is set to announce an investment from Alibaba rival JD.com.

* This story has been updated. Previous versions reported Alibaba’s stake was 95 per cent. This version includes official Alibaba confirmation of the deal.

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