Alibaba pours $634m into Lazada as competition heats up

Lazada, an ecommerce giant in Southeast Asia, has obtained another US$634 million in capital from its parent company Alibaba Group, according to Alternatives.pe.

The amount pushes the Chinese tech titan’s total injection into its subsidiary this year to over US$1.8 billion.

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

The funding comes as Alibaba continues to assess and adjust its strategies amid fierce competition in China from companies like PDD Holdings and Tencent. In its latest earnings report, Alibaba announced it shelved the planned spinoff its Cloud Intelligence Group, as trade restrictions had hampered the business unit’s growth.

Meanwhile, its international digital commerce segment posted a 53% year-over-year growth in revenue for second quarter of its 2024 financial year. Alibaba also said the unit, which houses Lazada, is preparing to raise funding.

Lazada faces intensifying competition in Southeast Asia from giants like Shopee. Earlier today, TikTok Shop announced its partnership with Tokopedia. TikTok also said it will invest US$1.5 billion into the merged entity to bankroll its growth.

Florian Hoppe, Asia-Pacific lead at Bain & Company’s Vector previously said that while TikTok Shop was still operational in Indonesia, it threw a a wrench into Lazada and Shopee’s plans of scaling in the country in a profitable manner. TikTok did so by winning over local customers with low prices, which it offered by relying heavily on subsidies.

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