Alibaba Invests Another $2 Billion Into Lazada For E-Commerce Expansion

Alibaba Invests Another $2 Billion Into Lazada For E-Commerce Expansion

In a move that is sure to have air cargo repercussions in the near future, the owners of China's Alibaba e-commerce marketplace have sent a message to rival Amazon by doubling its initial US$2 billion investment in Southeast Asian e-commerce firm Lazada Group to $4 billion.

Alibaba's first investment came in April 2016 when it bought 51 percent of Lazada for $1 billion, and it added another $1 billion last summer to increase its equity to around 83 percent.

Lazada's current CEO and founder, Max Bittner, will take on a new role as a senior adviser to Alibaba.

Peng, who is one of Alibaba's original 12 founders, has been Chairwoman of Lazada and is executive chairman of Ant Financial, Alibaba's fintech affiliate company. Former CEO Max Bittner will continue as "senior advisor to Alibaba Group" and, as TechCrunch reports, will be likely involved in future strategy planning, including the platform's expansion into global markets.

According to commentators, Southeast Asia is a lucrative market for e-commerce players as millions of first-generation internet users go online for shopping.

Yi Gang, US-trained economist, to lead China's central bank
Separately, Liu Kun, head of the budget office of parliament, was elected to be the new finance minister, replacing Xiao Jie. Equally, if not more important, the financial reforms must be taken to facilitate China's grand economic transition.

Despite Peng's account that just about three percent of the region's overall retail sales are conducted online, tech companies have continued to flex their muscles in Southeast Asia.

The region's online economy is expected to grow by as much as $200 billion by 2025, with this growth largely driven by eCommerce. On Monday, Alibaba announced it would invest $2 billion in an online retailer.

Launched in 2012, Lazada boasts more than 145,000 local and global sellers and 3,000 brands throughout Indonesia, Malaysia, Thailand, Vietnam and the Philippines.

Amazon entered the foray last year, but it remains only in Singapore, while Shopee is a two-year-old entrant bankrolled by Sea, formerly Garena, which raised over $1 billion in a U.S. IPO last year.

The Lazada acquisition also invites a showdown against fellow Chinese retailer JD.com Inc., which last fall formed a $500 million joint venture with Thailand's top retailer Central Group to boost its e-commerce presence in the region.

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