The Alibaba Group plans to invest about one billion dollars to raise its stake in the Lazada Group to around 83 per cent from the current 51 per cent. This investment reaffirms Alibaba’s commitment to the region and its strategy to globalise operations.
Alibaba released in a statement that they intend to buy shares from Lazada shareholders at an implied company valuation of $3.15 billion, reflecting a “significant increase” in Lazada’s value from when Alibaba took a majority stake in April 2016. This transaction will increase Alibaba’s investment in Lazada to over two billion.
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. Proving that Southeast Asia remains a hotspot for growth.
Alibaba has so far provided scale, e-commerce know-how and technological expertise to support Lazada’s efforts. That has allowed 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.