Chinese e-commerce giant Alibaba has reportedly invested an additional US $ 634 million in Lazada, its Singapore-based e-tail subsidiary. The aim is to bolster Lazada as it faces increasing competition from TikTok and other pure players in South-East Asia.
Since 2022, the group has been investing in Lazada; thus far this year, the e-tailer has received US $ 1.8 billion in funding.
Founded in 2012 as the Asian counterpart of Zalando, Alibaba acquired Lazada from Rocket Internet in 2016. Lazada is the group’s main source of revenue throughout the rest of Asia, even if Alibaba’s growth is currently plateauing. The online retailer is, nevertheless, focused with maintaining its market share despite fierce local competition.
TikTok, a Chinese technology company owned by ByteDance, has announced plans to buy a 75 per cent share in Tokopedia, the e-commerce division of Indonesia’s GoTo super-app. TikTok will be able to reenter the Indonesian e-tail industry thanks to the merger, following challenges with regulations.
The technology company Sea, based in Singapore, has also said that it plans to boost investment in its direct retail division. Sea is the company behind Shopee, another rival of Lazada.
Alibaba has apparently reviewed its plans for Lazada in light of these recent changes in Asia’s e-tail industry. According to Reuters in 2022, the group decided to introduce Lazada to the European market in an effort to find another source of growth. However, as Lazada started to encounter more intense competition in the Asia-Pacific area, the plans were eventually abandoned.
