Alibaba injects $845m into Lazada as competition intensifies

Alibaba has pumped another US$845.44 million into Lazada in the latest capital injection, according to a filing seen by Tech in Asia, as the ecommerce firm attempts to fight off growing competition in Southeast Asia.

According to our calculations, the Chinese tech giant already invested US$5.99 billion in Lazada before this round, including the US$1 billion in 2016 to take a controlling stake.

Tech in Asia has reached out to Lazada for official comments.

Lazada operates under Alibaba’s Global Digital Business Group, which also includes AliExpress, Trendyol, and Daraz.

Previously, analysts told Tech in Asia that Alibaba’s decision to split into six units could help the Southeast Asian ecommerce platform become “more decentralized and thus more agile,” paving the way for a future IPO.

Lazada was the second-largest ecommerce platform in Southeast Asia last year by gross merchandise value (GMV), which stood at US$20.1 billion, according to a recent report from venture builder Momentum Works. In first place was Shopee with US$47.9 billion.

Both are facing new competition with the likes of TikTok Shop upping their game. TikTok CEO Shou Zi Chew said earlier this year that his company plans to invest billions in Southeast Asia, one of its fastest-growing regions.

Alibaba is said to be mulling a potential US IPO for its international ecommerce unit. The Chinese company is already gearing up to list its cloud, logistics, and retail units separately.

China has shown signs of easing regulations on local tech giants, as the government sees major issues like market dominance starting to get addressed.

See also: Why Alibaba should spin off Lazada