Chinese online retail giant Alibaba is to invest $1 billion in the South East Asian online retailer Lazada, increasing its stake from 51% to 83%.
Alibaba released a statement making the announcement, saying that the move demonstrated its “confidence in the growth potential of the Southeast Asian markets and its commitment to the region as part of its global strategy”.
Alibaba first acquired its majority stake in Lazada in April 2016 and this new transaction will increase the Chinese’s online retail giant’s total investment in Lazada to over $2bn.
Alibaba said that its investment in Lazada had already brought “unrivalled access to consumers in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam” – and “with only 3% of the region’s total retail sales conducted online, Southeast Asia is expected to offer tremendous growth potential”.
With Amazon showing reluctance to get a foothold in the South East Asian market, it seems that Alibaba has taken advantage of the gap in the market. E-commerce in the region grew by 23% in the last year, and even so Amazon chose to defer its entrance to the market and instead opening a new website for Australia. South East Asia is set to be very much the place where the US and Chinese companies go head to head in what could be a very interesting time for all involved. Now Alibaba has all but taken over Lazada, it seems that the Dragon is waiting for its US rival to make a move…
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