Alibaba Group to buy controlling stake in online retailer Lazada for $1 bn
12 Apr 2016
Chinese e-commerce giant Alibaba Group Holding Ltd today struck a deal to buy a controlling stake in online retailer Lazada for about $1 billion in order to expand into Southeast Asia.
Alibaba will pay $500 million for new shares in Lazada and buy an equal amount from existing investors, including Germany's Rocket Internet SE, British supermarket chain Tesco Plc and Investment AB Kinnevik.
The agreement also has an option for Alibaba to buy out certain Lazada shareholders in a 12 to 18 month period after the deal closes.
Maximilian Bittner, CEO of Lazada said, ''We are very excited about joining forces with Alibaba and see significant synergies that will drive great benefits to our customers, sellers, brands and the broader eCommerce ecosystem in Southeast Asia. The transaction will help us to accelerate our goal to provide the 550 million consumers in the region access to the broadest and most unique assortment range.''
''Globalization is a critical strategy for the growth of Alibaba Group today and well into the future,'' said Michael Evans, President of Alibaba. ''With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China, a proven management team and a solid foundation for future growth in one of the most promising regions for eCommerce globally.''
''This investment is consistent with our strategy of connecting brands, distributors and consumers wherever they are and support our ecosystem expansion in Southeast Asia to better serve our customers,'' he added.
Founded in 2012 by Berlin-based Rocket, Lazada operates eCommerce platforms in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. These six countries combined have a population of approximately 560 million and an estimated Internet user base of 200 million, according to Internet Live Stats.
The deal is expected to help brands and distributors around the world that already do business on Alibaba's platform, as well as local merchants, to access the Southeast Asian consumer market.