Research and Markets - Alibaba Seeks Southeast Asia Expansion with USD 1 Billion Lazada Deal

Apr 12, 2016, 11:12 ET from Research and Markets

DUBLIN, April 12, 2016 /PRNewswire/ --

Chinese e-commerce giant Alibaba Group Holding Ltd. will make a USD 1 billion offer for control of Lazada Group SA, in a move that will make Alibaba a bigger player in the Southeast Asia market and help loosen its dependence on the home market in China. Alibaba will reportedly pay USD 500 million for shares in Lazada in addition to purchasing an equal amount from existing investors. The global online retail sector is expected to be worth USD 2,090.2 billion by 2019, according to a report available from Research and Markets, but this estimation could be higher thanks to Alibaba's expansion.

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Investors selling Lazada shares to Alibaba include Tesco Plc, Rocket Internet SE and Investment AB Kinnevik. The Southeast Asia region is on the verge of experiencing a massive growth in online shopping due to the growing numbers of people using mobile and Internet channels to buy goods online. Alibaba is dependent on China for most of its business, but the proposed deal could result in massive expansion for the company throughout other countries in Southeast Asia.

The global e-commerce logistics market is expected to grow at a CAGR of 9.69% by 2020, as forecast in a recent report. This forecast could be notably higher than expected if Alibaba is successful in acquiring Lazada, as Alibaba will be keen to extend its e-commerce routes throughout Asia.

The Southeast Asia B2C e-commerce market is predicted to maintain double-digit growth rates for the next several years, according to an industry report. This estimated growth could be stronger than predicted if Alibaba is able to extend its e-commerce retail influence in markets outside of China. 

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