Lazada Group CEO James Dong, 43, told Bloomberg News its specific plans will depend on macroeconomic and market conditions. But Alibaba is clearly ramping up its global ambitions, in part due to difficult economic conditions at home.
Dong, one-time business assistant to Alibaba CEO Daniel Zhang, take the reins of Alibaba’s most important international business unit in June after taking charge of Lazada’s operations in Thailand and Vietnam. This week, the Chinese parent company revealed it had invested $912.5 million in its Southeast Asia subsidiary – bringing the year’s capital flow to $1.3 billion.
“Europe is clearly a very large market and for most European brands their biggest retail partner is Alibaba Group because of their sales in China and other markets,” said Dong. said in an interview in Singapore. “We go where the brands want us to go.”
Lazada’s push in Europe will mark a resurgence in Alibaba’s global efforts, which have slowed in recent years in the face of stiff competition from Amazon and Tencent Holdings Sea do Ltd Co., Ltd. backing The Chinese company also had a mixed record outside of home. It made its way into US retail by launching 11 Main Inc. in San Mateo, which was based in California before a record 2014 IPO, only to sell the niche e-commerce site shortly after.
In 2016, Alibaba gained a foothold in Southeast Asia when it took control of Lazada. Just a year later, co-founder Jack Ma announced that Alibaba could one day become the world’s fifth largest economy, serving an estimated 2 billion people – a boast that went viral at the time. That point has been rarely talked about since COVID-19, a punishment for government repression and an economic downturn that has snuffed out its once rapid growth. Ma himself became a target of Beijing, which killed Ant Group Co’s IPO. after the billionaire publicly criticized China’s state-dominated banking system in 2020.
With difficulties at home, Alibaba is now once again intent on revitalizing the company by tapping overseas markets. Lazada is arguably the most successful overseas effort since the end of the year, along with low-cost website AliExpress that has become popular in emerging markets such as Brazil.
Lazada’s growing investments stand in stark contrast to arch-rival Shopee, Singapore’s e-commerce unit Sea, which withdrew after years of aggressive international push from Brazil to Poland to drive growth beyond Southeast Asia. Shopee pulled out of France as well as India in March, just months after launching operations in these markets as it tried to increase profits.
Sea has suffered another set of setbacks this year, including an abrupt ban on the most popular mobile game in India. Its shares have fallen about 70% this year as investor appetite for growth stocks wanes amid a global stock market downturn. Sea said it plans to focus on Southeast Asia, Taiwan and Brazil rather than spending big to enter new markets.
Lazada, meanwhile, has invested in businesses such as Indonesian digital wallet provider DANA, in which it has invested a total of $304.5 million, according to stock exchange filings. It also led a 750 million ringgit ($168 million) funding into TNG Digital Sdn., the owner and operator of Malaysia’s largest e-wallet company Touch ‘n Go.
“We are continuing to invest,” Dong said. Lazada’s investments such as DANA and TNG Digital “show a very high level of commitment in this environment.”
Lazada plans to add several hundred employees in Indonesia in the coming months and expand its office in Jakarta to drive growth in Southeast Asia’s largest and most important market. The company was established 10 years ago, currently operating in six countries including Malaysia, Singapore, Thailand, Philippines and Vietnam.
Alibaba has long advocated for more open ecosystems, arguing that users should have more choices. The Chinese company wants Lazada to serve more than 300 million users by 2030, double its 150 million customers today.
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