With the Lazada-Alibaba marriage, is it game over for rivals?

Lazada boss Maximilian Bittner. He built up Lazada as part of the Rocket Internet empire before the Alibaba sale. Photo credit: Lazada.

Before Jack Ma started Alibaba, he was a teacher. Decades later, he still is.

Maximilian Bittner, CEO of Southeast Asian ecommerce bigwig Lazada, recounts a conversation with Jack after Alibaba’s acquisition of his company, which valued it at US$1.5 billion.

Jack got excited by how youthful the Lazadians were, and how he could share his knowledge with them. “We’ve learned a lot from Alibaba in terms of the ways we can support merchants at scale,” says Max.

Lazada will need a lot of lessons. Yes, it claims to be the undisputed ecommerce leader in Southeast Asia. It’s in pole position in five of its six markets, “by any metric,” says Max (Carousell declined to comment; Tokopedia did not respond to repeated requests from Tech in Asia).

But Lazada is about to have the fight of its life. Amazon’s looming on the horizon: it’s set to break into Southeast Asia this year.

The partnership with Alibaba, Lazada hopes, will deepen its moat through unprecedented integrations with Jack’s vast empire.

Efforts are already underway, turning Lazada into a global marketplace instead of just a Southeast Asian one.

Making Lazada and Alibaba one

Logistics is the unseen backbone of ecommerce. That’s why the integration between Alibaba’s logistics arm, Cainiao Network, and Lazada may be the most important piece of the puzzle.

Lazada has begun doing deliveries for Taobao, Alibaba’s consumer-to-consumer marketplace, in Malaysia.

It’s testing cross-border trade, not just within Southeast Asia (allowing a merchant in Malaysia to sell to Indonesia, for example), but also between Lazada and Tmall Global, a program which helps foreign brands access Chinese consumers.

“Let’s say a merchant from China wants to sell into Southeast Asia. Cainiao helps us with the first mile in China. The stuff gets aggregated in our sortation house in Shenzhen. And then from there we take over and do the forwarding and injection into our local logistics network,” says Max. The reverse is happening too.

Brands benefiting from this arrangement include Singapore’s Motherswork, which is now sold on Tmall, as well as China’s Xtep, QCY, and Semir, which can be found on Lazada.

Cards close to his chest

Elephant in the room