Alibaba lifts Lazada stake

Alibaba Group will invest another $1bn to raise its stake in online mall Lazada Group to 83%, securing control of a fast-growing start-up at the vanguard of its expansion in Southeast Asia.

Alibaba Group will invest another $1bn to raise its stake in online mall Lazada Group to 83%, securing control of a fast growing start-up at the vanguard of its expansion in Southeast Asia.

The Chinese e-commerce leader was buying out most other backers in a deal that valued the Singapore-based company at $3.15bn, Lazada CEO Maximilian Bittner said.

Management and Temasek Holdings remain as the only other investors.

Lazada backers Rocket Internet and Swedish investment company Kinnevik said on Wednesday that they were among the sellers. The start-up’s previously disclosed backers also include British supermarket chain Tesco.

Alibaba took control of Lazada in 2016 from Rocket in a $1bn deal, its largest overseas move to date. The firm that Bittner started in 2012 is pivotal to quickening the Chinese online retailer’s forays abroad, fulfilling billionaire co-founder Jack Ma’s ambitions of becoming a truly international business.

Lazada’s home turf is shaping up to be the next battleground for Alibaba and main Chinese rival JD.com, with Amazon down the road.

While still lacking the transport and payments infrastructure crucial to the widespread adoption of e-commerce, the region has become the world’s fastest-growing internet arena, with a populace of more than 600-million getting more comfortable with online shopping.

“Obviously, this allows Alibaba to expand its global footprint, giving them unrivalled access to users,” Bittner said in an interview. “E-commerce penetration in Southeast Asia is only roughly 3%, so the partnership is a great step change.”

Amazon has not yet voiced its intentions for Southeast Asia, but the industry expectation is that its constant quest for growth will lead it there sometime in 2017. Now that Alibaba has established its dominance of China and Amazon has taken the lead in the US, both are looking to make their mark overseas. JD is also said to be in talks to invest hundreds of millions of dollars in Indonesian online marketplace Tokopedia.

Alibaba has been the most aggressive thus far. It is amassing a regional presence in anticipation of Amazon’s eventual entry.