Jack Ma ex­tends his reach in South­east Asia

China Daily (Hong Kong) - - FRONT PAGE -

Inc down the road.

While still lack­ing the trans­port and pay­ment in­fra­struc­ture cru­cial to the wide­spread adop­tion of ecom­merce, the re­gion has be­come the world’s fastest­grow­ing in­ter­net arena.

“Obviously this al­lows Alibaba to ex­pand its global foot­print, giv­ing them un­ri­valed ac­cess to users,” Bit­tner said.

“E-com­merce pen­e­tra­tion in South­east Asia is only roughly 3 per­cent, so the part­ner­ship is a great step change,” he added.

Lazada is a key part of Alibaba’s global ex­pan­sion plans. They have col­lab­o­rated dur­ing the past year, and now have un­ri­valed ac­cess to ap­prox­i­mately 560 mil­lion con­sumers in In­done­sia, Malaysia, the Philip­pines, Singapore, Thai­land and Vietnam.

On the lo­gis­tics front, Alibaba-backed courier Cainiao, to­gether with Lazada, will set up an e-com­merce hub at Kuala Lumpur In­ter­na­tional Air­port in Malaysia as a part of the duty free trade zone.

By 2019, the NASDAQ-listed on­line group will roll out a ma­jor lo­gis­tics hub in Thai­land to in­crease its pres­ence in the re­gion.

As for global ri­val Ama­zon, it has yet to make a play for South­east Asia. But in­dus­try in­sid­ers ex­pect the com­pany to pitch up there as early as this year.

Now that Alibaba has estab­lished its dom­i­nance of China and Ama­zon has taken the lead in the United States, both are look­ing to make their mark over­seas.

JD.com, whose pref­er­ence for build­ing its own dis­tri­bu­tion net­work more closely mir­rors Ama­zon’s, is also ru­mored to be in talks to in­vest hun­dreds of millions of dol­lars in In­done­sian on­line mar­ket­place Toko­pe­dia.

“Yet Lazada’s long-term suc- cess in the re­gion is far from as­sured as Ama­zon is eye­ing a launch in South­east Asia through Singapore,” said Jer- emy Kress­mann, an an­a­lyst at eMar­keter.

“The moves could kick off a heated bat­tle be­tween Ama- zon and Alibaba’s proxy for both mar­ket share and cus­tomers as the re­gion’s e-com­merce spend­ing rises,” he added.

De­spite its sheer scale, Alibaba still de­rives most of its rev­enue from China. Still, it has been the most ag­gres­sive player in South­east Asia.

It is amass­ing a re­gional pres­ence in an­tic­i­pa­tion of Ama­zon’s even­tual en­try.

Ma even trav­eled to Kuala Lumpur in March to de­clare Malaysia its first lo­gis­tics hub out­side of China, a cen­tral­ized ware­hous­ing and dis­tri­bu­tion launch­pad for the re­gion.

Next door is In­done­sia, the world’s fourth-most pop­u­lous na­tion, and con­sid­ered among the most promis­ing mar­kets in South­east Asia.

The coun­try draws com­par­isons with China a decade ago, with its lack of re­tail in­fra­struc­ture, an ex­plod­ing mo­bile-user base, and a grow­ing mid­dle-class crav­ing leisure and qual­ity goods.

Lazada is po­si­tioned to help Alibaba break into that mar­ket as it runs about a dozen ware­houses and scores of dis­tri­bu­tion cen­ters from which it con­veys goods di­rectly to buy­ers.

“Lazada prop­er­ties drew the largest num­ber of page views among B2C (business to con­sumer) re­tail sites in Thai­land, In­done­sia, Singapore, Malaysia and Vietnam in De­cem­ber, 2016,” data re­leased by Sim­i­larWeb, a dig­i­tal mar­ket in­tel­li­gence com­pany, stated.

Although the com­pany is com­pet­ing against well-funded ri­vals from Mata­har­iMall to Sea Ltd, CEO Bit­tner be­lieves Lazada can count on Alibaba’s ex­per­tise.

Ear­lier this year, Lazada in­tro­duced Alibaba’s Taobao on­line bazaar to Singapore via a ded­i­cated web­site.

It has so far pro­vided scale, e-com­merce know-how and tech­no­log­i­cal ex­per­tise to sup­port the Singapore com­pany’s ef­forts.

That has al­lowed Lazada to in­vest fur­ther in the mar­ket­place, through tech­nol­ogy, pay­ments and lo­gis­tics, en­hanc­ing its ser­vices and cus­tomer ex­pe­ri­ence.

Alibaba has also helped Lazada cre­ate an on­line loy­alty and ser­vices pro­gram that of­fers UberEats and Net­flix along with free de­liv­er­ies from Alibaba’s Taobao and on­line gro­cer Red­mart.

“It was the first time that US com­pa­nies have jointly cre­ated an on­line re­wards pro­gram,” Bit­tner said.

For Alibaba, the move makes sense as it stakes an early claim in a mar­ket with enor­mous po­ten­tial.

“The e-com­merce mar­kets in the re­gion are still rel­a­tively un­tapped, and we see a very pos­i­tive up­ward tra­jec­tory ahead of us,” Daniel Zhang, chief ex­ec­u­tive of­fi­cer at Alibaba, said in a state­ment.

“We will con­tinue to put our re­sources to work in South­east Asia through Lazada to cap­ture these growth op­por­tu­ni­ties,” he added.

DAR­REN WHITE­SIDE / REUTERS

An em­ployee at on­line re­tailer Lazada fills an or­der at the com­pany’s ware­house in Jakarta, In­done­sia.

SHEN HONG / XIN­HUA

Staff hold a tele­con­fer­ence at Alibaba Group Hold­ing’s head­quar­ters in Hangzhou, Zhe­jiang prov­ince.

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