Alibaba, China’s leading e-commerce company, announced that they will be pouring in another $2 Billion to Lazada. They also confirmed the appointment of one of their founders as the new head of the Southeast Asian online shopping company in a bid to increase expansion in the region.
Alibaba already currently owns 83% of Lazada after two investments totalling $2 billion over the last two years. It is not disclosed how much stake the Chinese company now has after this recent investment that bring their total to $4 Billion. Singapore’s Temasek Holdings and Lazada management are the only other stakeholders of Lazada.
“The investment underscores Alibaba’s confidence in the future success of Lazada’s business and the growth prospect of the Southeast Asian market, a region that is a key part of Alibaba’s global growth strategy,” Alibaba has said in a statement.
Following this move, Lazada’s founder Maxx Bittner will be stepping down as chief executive but will be staying on as a senior adviser to the company “to assist in the transition and future international growth strategy”.
Lucy Peng, one of Alibaba’s 18 founders, is currently the chairwoman of Lazada but will now assume the head position at the Southeast Asian firm.
“With a young population, high mobile penetration and just 3 percent of the region’s retail sales currently conducted online, we feel very confident to double down on Southeast Asia,” Peng explained.
The changes come as the competition for online shopping in the region surges up with Amazon launching its Prime Now services in Singapore last year and JD.com of China increasing its presence in both Indonesia and Vietnam.
Based in Singapore, Lazada was first launched in 2012 and has since expanded to operate in several Asian countries including the Philippines, Malaysia, Indonesia, Vietnam, and Thailand. They have 560 million users as of this writing.