Alibaba is making a significant investment of $634 million into its e-commerce subsidiary, Lazada, based in Singapore. This move comes as Lazada faces increasing competition from rivals such as TikTok and other pure players in the South-East Asia region. The investment was made through a share placement conducted by Lazada on November 13th.

This is not the first time Alibaba has injected capital into Lazada; it has already invested a total of $1.8 billion in the e-commerce company this year alone. Lazada was founded in 2012 as an Asian version of Zalando and was acquired by Alibaba in 2016. Despite the fact that Alibaba’s growth has slowed recently, the company is relying on Lazada to drive revenue in the rest of Asia.

However, Lazada is facing stiff competition in its attempts to protect its market share. In Indonesia, TikTok recently announced its acquisition of a 75% stake in Tokopedia, the e-commerce arm of Indonesia’s GoTo super-app. This move allows TikTok to reenter the Indonesian e-tail market, despite regulatory challenges. Additionally, Sea, the operator of Shopee, another competitor of Lazada based in Singapore, has expressed its intention to increase investment in its direct retail business.

These developments in the e-commerce sector in Asia are causing Alibaba to reconsider its plans for Lazada. Last year, there were reports that Alibaba intended to launch Lazada in the European market for additional growth. However, these plans were put on hold due to the tougher competition Lazada faced in the Asia-Pacific region.

In the second quarter of this year, Alibaba’s online sales in China grew by just 4% to $13.3 billion, while its international e-commerce business experienced significant growth, surging by 53% to $3.3 billion. This demonstrates Alibaba’s commitment to strengthening its position in the South-East Asian e-commerce market.

As competition intensifies, it remains to be seen how Lazada will navigate this challenging landscape and whether it will successfully defend its market share.

Sources:
– [Alibaba invests $634m in Lazada to bolster its position in South-East Asia](source)
– [TikTok and Chinese state-owned firm set to buy top Indonesian e-commerce player](source)