Alibaba To Acquire Stake In Lazada Group

16 Apr

Alibaba acquisitions, Lazada Group

Alibaba shakes hands with Lazada Group of Southeast Asia to tap into Southeast Asia

Alibaba Group Holding Limited made an announcement today regarding the acquisition of a controlling stake in Lazada Group, the Southeast Asian e-commerce initiative.

The Chinese E-commerce giant will get hands on recently issued stocks that accumulate to $500 million whereas the remaining stocks will be purchased from the shareholders of Lazada through a deal. This deal will cost an amount worth $1 billion to Alibaba. This move indicates the company’s desire to expand into a new region so that it can assist the distributors and brands that are present on this panel.

Alibaba is likely to explore new horizons via the deal. This will help them make a mark in Southeast Asia bolstering their business and presence in the region. Micheal Evans, the President of Alibaba stated while talking about the possibilities and opportunities the company will deal with during expansion.

Mr. Evans stated, “With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China, a proven management team and a solid foundation for future growth in one of the most promising regions for eCommerce globally. This investment is consistent with our strategy of connecting brands, distributors and consumers wherever they are and support our ecosystem expansion in Southeast Asia to better serve our customers.”

At this point of time, Lazada is said to be the best e-commerce platform, which caters to six distinct countries such as Vietnam, Indonesia, Thailand, Malaysia, Philippines and Singapore. The combined population of these countries is accumulated to be almost 560 million among which almost 200 million individuals are staunch Internet users as per various sources. The e-commerce industry in Southeast Asia is untapped.

When it comes to the remaining stocks, Alibaba has revealed its plans regarding a put call deal with a bunch of Lazada stakeholders. This gives both the involved parties the due rights to trade stocks for a 12 to 18 months period. This is possible once the transaction is completed.

The Chief Executive Officer of Lazada Group, Mr. Maz Bittner is also optimistic about the deal along the prospects, which Alibaba can offer to it. Mr. Bittner mentioned in a press release that his company is extremely excited about joining hands with Alibaba. Both the companies offer significant synergies that will result in benefit to the company in the Southeast Asian region.

The market in Southeast Asia is lucrative in terms of mobile users being extremely diverse allowing them to enter a retail sector, which is in its infancy stage with immense room for growth. The collaboration will allow them to push their goal of offering 560 million people in the region with a wide range of products. He concluded by saying that it is leveraging Chinese tech giant’s position in the market. Furthermore, the technology Alibaba has in hands will allow Lazada to rapidly improve its services in order to offer a better and more effortless shopping and selling experience on its online marketplace.

Hence Alibaba and Lazada Group are all set to make a mark in a region where e-commerce can flourish.

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Posted by on April 16, 2016 in Technology


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