Alibaba injects extra $634 million into Lazada

Chinese e-commerce giant Alibaba continues to pour money into Lazada. The group has reportedly invested an additional $634 million (€581 million) in 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.

On Thursday November 13, Lazada issued a share placement with Alibaba’s Singaporean subsidiary, according to a statement filed with local authorities. It is not the first operation of this kind carried out by Alibaba. The group has been injecting money into Lazada since 2022, and a total of $1.8 billion have been poured into the e-tailer this year.

Lazada was founded in 2012 as an Asian version of Zalando, and in 2016 Alibaba bought it from Rocket Internet. While Alibaba’s growth is currently plateauing, the group is relying on Lazada to drive revenue in the rest of Asia. However, the e-tailer is busy trying to defend its market share in the face of stiff local competition.

In Indonesia, TikTok, owned by Chinese technology group ByteDance, announced on Monday that it will acquire a 75% stake in Tokopedia, the e-commerce arm of Indonesia’s GoTo super-app. The merger will enable TikTok to make a come-back on the Indonesian e-tail market, after facing regulatory headwinds.

Singapore’s technology group Sea, which operates Shopee, another competitor of Lazada, has also announced it intends to increase investment in its direct retail business.

These new developments in Asia’s e-tail sector have reportedly led Alibaba to review its plans for Lazada. In 2022, Reuters reported that the group had decided to launch Lazada on the European market, looking for an additional growth driver. But the plans was eventually shelved as Lazada began to face tougher competition in the Asia-Pacific region.

In the July-September period, Q2 of its non-standard fiscal year, Alibaba’s online sales in China grew by only 4% to $13.3 billion, as its sites Taobao and Tmall were hit by a weaker-than-expected rebound in local consumption. Conversely, the group’s international e-commerce business grew by 53%, surging to $3.3 billion in the same period.