Alibaba injects a further $2b in Lazada as Max Bittner steps down as CEO

Lazada CEO Max Bittner / Photo credit: Tech in Asia

Alibaba will invest US$2 billion more in unit Lazada and appoint one of its most senior executives to run it.

Lucy Peng, chairman of Lazada, will now assume the additional role of CEO. Peng is one of Alibaba’s 18 founders and also the executive chairman of the Chinese behemoth’s fintech affiliate, Ant Financial.

She’s replacing current CEO Max Bittner, who will assume the role of senior advisor to Alibaba and assist in the transition.

The latest injection will up Alibaba’s stake in Lazada to an undisclosed figure from the current 83 percent, a spokesperson for the group told Tech in Asia. It will also speed up the ecommerce firm’s growth plans. Alibaba has plowed US$4 billion in Lazada to date.

“We feel very confident to double down on Southeast Asia,” said Peng. “And we are excited about the incredible opportunities for super-charged growth.”

Taking the wheel

Steven Zhu, an analyst at Shanghai-based Pacific Epoch, told Bloomberg that the move is part of Alibaba’s overseas expansion strategy, where it’s using Lazada as a testing ground. “Now it’s going to run operations itself,” he was quoted as saying.

Indeed, Alibaba has been installing its own officials in Lazada – Chun Li, an Alibaba CTO, also joined Lazada as co-president of technology. Reporting to him is Raymond Yang, also another Alibaba veteran who’s now Lazada’s chief product officer.

The online retailer was reported to be shutting down its Bangkok and Moscow engineering centers and moving staff to its other tech hubs, including the one in Shenzhen that’s right inside parent Alibaba’s HQ in the city.

See: Meet Lucy Peng, Lazada’s new CEO

Putting Peng in charge seems to show the “determination” and “urgency” to make Lazada work for Alibaba and prove that the latter can “internationalize,” commented Singapore-based venture builder Momentum Works in a blog post.

Lawrence Cheok, senior research manager at IDC, takes a similar view. “The change of CEO is a departure in style from past international expansion efforts. It signifies tighter alignment, potentially needed to accelerate the next steps toward realizing Jack Ma’s electronic world trade platform (eWTP).”

The eWTP is envisaged as a set of international rules aimed at pulling down barriers to ecommerce – such as those relating to import duties and customs clearance – and helping small and medium-sized enterprises conduct cross-border trade. Specifically, it’s seen to allow Chinese merchants on Alibaba’s ecommerce sites to sell to more people in Southeast Asia.

“For Lazada to play a contributing role in eWTP, it must continue to take a leading position amidst intensifying competition in Southeast Asia,” Cheok stated.

Escalating war