Alibaba expands, makes a $1 billion investment into Lazada

Irish Sun Tuesday 12th April, 2016

alibaba expands, makes a $1 billion investment into lazada

• Acquiring Lazada stake helps Alibaba expand in Southeast Asia

• The $1 billion Lazada deal will give Alibaba control in six Southeast Asian markets

• Alibaba will buy stock from Tesco, Rocket Internet and Kinnevik

HANGZHOU, China - In a bid to boost sales beyond its home country, leading eCommerce group from China, Alibaba Group Holding has acquired controlling stake into Lazada Group in a $1 billion deal.

The company’s huge investment into the Southeast Asia e-commerce platform, Lazada will make Alibaba the e-commerce platform’s controlling shareholder.

Alibaba said in an official statement that it would pay $500 million for new shares in the closely held company and also purchase stock from existing investors.

Reports claimed that Lazada investors who would be selling stakes include Rocket Internet SE, Tesco Plc and Investment AB Kinnevik.

According to Rocket Internet, that founded the company in 2011, Lazada is now valued at $1.5 billion.

Rocket Internet, Tesco, and Kinnevik each said that they had sold some of their Lazada shares to Alibaba as part of the transaction.

Rocket Internet is said to have offloaded a 9.1 percent stake for $137 million, while Tesco reportedly sold an 8.6 percent stake for $129 million, and Kinnevik meanwhile parted with a 3.8 percent stake for $57 million.

Alibaba plans to boost its focus on the Indian and Southeast Asian market to grow and expand beyond China

Alibaba president Michael Evans said in the statement, “Globalization is a critical strategy for the growth of Alibaba Group today and well into the future. With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China, a proven management team and a solid foundation for future growth in one of the most promising regions for e-commerce globally. This investment is consistent with our strategy of connecting brands, distributors and consumers wherever they are and support our ecosystem expansion in Southeast Asia to better serve our customers.”

Lazada currently operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Max Bittner, CEO of Lazada Group said in a statement, “We are very excited about joining forces with Alibaba and see significant synergies that will drive great benefits to our customers in Southeast Asia. Southeast Asia is an attractive mobile-driven consumer market that is highly fragmented and diverse with significant barriers to entry and a nascent modern retail sector that has large headroom for growth. The transaction will help us to accelerate our goal to provide the 560 million consumers in the region access to the broadest and most unique assortment of products. Furthermore, leveraging Alibaba’s unique knowhow and technology will allow us to rapidly improve our services and provide an even more effortless shopping and selling experience.”

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