Lazada eyes Europe in first expansion beyond SEA

Over a year since China began its sweeping clampdown on big tech and months into Russia’s war on Ukraine, Alibaba is plotting its next move: bringing Lazada to Europe.

Jiang Fan – who heads Alibaba’s international digital commerce businesses, which include Lazada, AliExpress, and Alibaba.com – was in Singapore earlier this month to forge a path for the company’s international business units and better utilization of its overseas assets, Tech in Asia understands.

While details of the expansion are not yet clear, observers have floated France, Spain, and Poland as possibilities.

Potential markets for Lazada in Europe would be “where AliExpress has been operating for a long time and thus where Alibaba as a group is familiar with the payment, logistics infrastructure, marketing, and more importantly user operations,” Jianggan Li, founder and CEO of venture builder Momentum Works, tells Tech in Asia.

International ecommerce makes up a small portion of Alibaba’s revenue, but it has become increasingly important. China’s crackdown on big tech firms, for one, remains far from over, even as it has foiled an Ant Financial IPO and overhauled Alibaba’s financial services business.

But why would Lazada want to target Europe, a continent where rival Shopee has been trying to break into with mixed success? A possible answer: The move could counter the heightened competition that Lazada is facing in Southeast Asia as it looks to quintuple shopping volumes, help Alibaba mitigate the impact of the Ukraine war on AliExpress, and strengthen the company’s international footprint.

Since late February, ecommerce orders on the AliExpress Russia platform – a joint venture between Alibaba and three Russian partners – have fallen, owing to shipping delays and a depreciation of the ruble caused by international sanctions. Last year, more Russians used AliExpress each month than in any other market worldwide, according to industry estimates.

Jiang, who was appointed to lead Alibaba’s newly formed digital commerce unit in December 2021, now holds the key to grow the company’s international customer base from 301 million to the 2 billion customers it envisions.

See also: Org Chart: The people steering Lazada

Combining AliExpress’ logistical expertise with the Lazada brand could be the first step in this endeavor.

Lazada declined to comment on this story.

The AliExpress advantage

Alibaba’s first major reorganization last year brought AliExpress and Lazada under the same “international digital ecommerce” roof. Both marketplaces could create further synergies by sharing the same tech stack and logistics network, as well as leveraging AliExpress’s knowledge of consumer preferences in Europe.

Winning in Europe

Losing ground in Southeast Asia