Southeast Asia remains ‘very important’ for Alibaba, says its international CEO

Chinese tech giant Alibaba has been having a tough time battling the likes of Pinduoduo and Sea Group in Southeast Asia. / Photo credit: Shutterstock

Southeast Asia’s ecommerce competition is getting fiercer following Temu’s entry and TikTok Shop’s growing presence, and Lazada is feeling the heat. The platform, once the regional leader, laid off up to 30% of its employees across all of its markets right after the new year started.

Parent company Alibaba Group, however, remains optimistic. It sees Southeast Asia as “a very important market” and believes there is still “significant potential” for Lazada to deepen its penetration in the region.

“Our approach is to continue to balance efficiency against growth, to continue to work to narrow the losses in the business while maintaining growth,” said Jiang Fan, CEO of Alibaba International Digital Commerce (AIDC), in the group’s latest earnings call. AIDC oversees platforms such as Lazada, AliExpress, Daraz, and Trendyol.

The CEO emphasized that the Chinese ecommerce giant will continue to make investments in Lazada at an “appropriate scale.” Alibaba last injected additional capital into Lazada in December 2023, to the tune of US$634 million.

During the quarter ending in December 2023, Lazada’s loss per order narrowed year over year, according to the company. Fan or other executives did not further discuss Lazada’s growth in the call. However, Alibaba stated in its financial report that Lazada will continue increasing monetization and decreasing logistics costs.

Alibaba’s international ecommerce business has had an eventful start of 2024. Aside from Lazada’s layoffs, Pakistan-headquartered Daraz – which Alibaba acquired in 2018 – recently announced some changes.

Daraz, which also operates in three other South Asian countries, announced in late January that its founder and CEO Bjarke Mikkelsen would step down. Lazada group CEO James Dong will take Mikkelsen’s place as acting CEO.

AIDC’s revenue did grow 44% year on year in the latest quarter. Toby Xu, Alibaba’s CFO, said during the earnings call that the increase was primarily due to solid revenue growth from AliExpress, especially in the Choice business and Trendyol.

In addition, total orders from AIDC platforms also jumped by 24% year on year, driven by strong growth in the cross-border business. CEO Fan added that AliExpress posted an order growth of over 60% during the period.

See also: What’s Lazada’s future after hefty job cuts? Insiders tell us