Following this latest capital injection into Lazada, the total investment value of Alibaba into this e-commerce platform attained US$6 billion.
Heaptalk, Jakarta — Alibaba Group Holding Ltd is reportedly injected additional fresh fund worth US$845 million, or approximately RP12.6 trillion, into its online retail subsidiary in Southeast Asia, Lazada. The capital infusion is expected to back Lazada in boosting the businesses of local merchants and equip them to navigate the intensifying rivalry in the local market.
This investment information was delivered in the regulatory filling in Singapore on Wednesday (07/19). As per calculations, the latest injection has given Alibaba’s total investment in Lazada to about US$6 billion, or equal to RP89,880 trillion, since this substantial Chinese company acquired a controlling stake in Lazada in 2016, with a significant US$1 billion investment in 2017 and US$2 billion in 2018.
According to the latest Venture Builder Momentum Works report, Lazada occupies the second position of the largest e-commerce platform in Southeast Asia based on Gross Merchandise Value (GMV), attaining US$20.1 billion in 2022. This outcome follows the first Shopee’s position with a GMV of US$47.9 billion. This rivalry continues to be fiercer for these e-commerce companies due to the presence of new players TikTok Shop who are increasingly reinforcing its capabilities to dominate the e-commerce market.
Cited in Pingwest, this investment augmentation comes after Alibaba’s restructuring decision and Alibaba International Digital Business Group’s establishment in March 2023. In its strategic reorganization, Alibaba has classified its businesses into six units, including placing Lazada under the auspices of the International Digital Business Group. This move will open opportunities for Lazada to conduct an Initial Public Offering (IPO).
As it is known, Alibaba is considering conducting a US IPO for its international e-commerce unit. This plan comes as the company has prepared to list its cloud computing, logistics, and retail units as separate entities. The potential IPO indicates that Jack Ma’s tech holding company is a significant step toward evolving the visibility and financial performance of its e-commerce business unit.
Moreover, the Chinese government has recently shown indications of easing regulations on local tech companies, realizing the need to address concerns related to market dominance. As a result, Alibaba performs numerous strategic efforts to navigate the regulatory landscape and amplify its position in the domestic and international markets.
In 2022, Alibaba also discussed raising around US$1 billion for Lazada before dropping negotiations with potential investors when talks stalled over valuation issues. It had aimed to secure the funding as a precursor to the spin-off. Since then, Alibaba Group has mothballed the fundraising and injected additional funds into the company instead.
