Alibaba raises stakes in Southeast Asia’s Lazada with $1B investment

In a bid to expand its footprint across Southeast Asia, Chinese e-commerce giant Alibaba will be investing $1 billion in online retailer Lazada Group, boosting its stake by nearly a third to 83 percent, the two companies said in a joint statement.

In April 2016, Alibaba made an initial $1 billion investment in Lazada at a valuation of $1.5 billion which goes up to $3.15 billion with the latest funding. The deal sees Alibaba buy shares from existing backers, including Rocket Internet. Notably, Singaporean sovereign fund Temasek and the Lazada management team are the only investors that kept hold of their stock.

Lazada, founded in 2012, is headquartered in Singapore and operates in six Southeast Asian countries including Malaysia, Indonesia, the Philippines, Thailand, and Vietnam. It is primarily focused on e-commerce, but it expanded into e-groceries with the acquisition of Singapore-based Redmart last year.

“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,” said Daniel Zhang, CEO of Alibaba Group.

During the past 12 months, both Lazada and Alibaba worked on a number of initiatives to advance e-commerce in Southeast Asia, endeavoring to lower barriers and facilitate borderless commerce. These initiatives include the establishment of an e-fulfillment center in Malaysia which forms part of Alibaba’s Electronic World Trading Platform (eWTP) strategy, advancing “Thailand 4.0”, and launching Taobao Collection in Singapore and Malaysia allowing local customers to shop for high-quality products from China.