Alibaba Group Holding Ltd will invest another $2 billion in Lazada Group SA and install one of its most senior executives to run the business as it doubles its bet on Southeast Asia.
Lucy Peng, who is already chairman of Lazada, will take over as chief executive officer, according to a statement on Monday. Current CEO Max Bittner will step down and remain as a senior adviser.
Alibaba is gearing up for an intense battle in Southeast Asia, where Amazon.com Inc. has launched in Singapore and Sea Ltd’s Shopee is expanding to win consumers. The new investment, which comes after Alibaba spent about $2 billion buying control of Lazada, gives the cash burning business much needed ammunition for technology development and customer acquisition.
“This is part of its overseas expansion strategy, where it’s using a specific platform as a testing ground,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Now it’s going to run operations itself.”
Southeast Asia is an important aspect of Alibaba’s global expansion and a thriving region that Chinese arch-foe JD.com Inc. is also targeting. JD CEO Richard Liu has pledged to be in every Southeast Asian country before the end of the year.
Lazada’s other shareholders include management and Temasek Holdings Pte. Alibaba paid $1 billion for a stake in Lazada in 2016 before putting another $1 billion in last year to increase its holding to 83%. The company declined to say how its stake will change with the latest investment.
“We feel very confident to double down on Southeast Asia,” Peng said in an emailed statement. “We are excited about the incredible opportunities for super-charged growth.” Peng is also executive chair at Ant Financial, the payments affiliate of Alibaba. Bloomberg
Source: Mint