Alibaba is ponying up $1 billion to increase its stake in Lazada from 51% to 83%

Chinese e-commerce giant Alibaba Group reportedly invests 1 bln dollars online retailer in Southeast Asia, Lazada Group. So online giant raised its stake by almost a third to 83%...

Chinese e-commerce giant Alibaba Group reportedly invests 1 bln dollars online retailer in Southeast Asia, Lazada Group. So online giant raised its stake by almost a third to 83% and strengthens its focus on the region.

The announcement of the investment from Alibaba come in a time when competitors like JD.com, also known as Jingdong and formerly called 360buy, expanded its presence in the Southeast Asia. At the same time the media claim that Amazon plans to enter the region with a population of 600 million people where only part of the total retail sales are currently made online.

The move doubles Alibaba ownership in Lazada after last year’s deal to buy a controlling stake for around 1 bln dollars and is part of the company’s efforts to increase its global sales. Alibaba had the option to buy the rest of the stake in Lazada 12-18 months after closing.

“The markets for e-commerce in the region are still relatively undeveloped and we see a very positive upward before us,” said Daniel Zhang, CEO of Alibaba. “We will continue to put our resources to work in Southeast Asia by Lazada and to capture these growth opportunities,” he said.

“That [valuation] is quite a significant uptick and overall that reflects the great performance and traction that Lazada has seen. It also reflects that Alibaba continues to be extremely positive about this region, doubling down on Southeast Asia and seeing the potential,” Lazada CEO Max Bittner told media.

On Wednesday, Alibaba announced yet, it would buy shares from certain shareholders in Lazada, valuing the company at 3.15 billion dollars. The company did not announce the names of the shareholders, but in separate statements the German Rocket Internet and Swedish Kinnevik confirm that they are ready to sell their remaining stakes in Lazada.

Last year’s deal included a partial sale of shares from investors, including British operator Tesco, Kinnevik and Rocket.

Lazada, founded in 2012, is based in Singapore and operates in Malaysia, Indonesia, Philippines, Thailand and Vietnam. Alibaba reported in its annual report that in the 12 months to March 31, 2017 it had 23 million active buyers annually.

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