Hong Kong: Alibaba Group Holding Ltd will invest another $1 billion to raise its stake in online mall Lazada Group SA to 83%, securing control of a fast-growing start-up at the vanguard of its Southeast Asian expansion.
The Chinese e-commerce leader is buying out most other backers in a deal that values the Singapore-based start-up at $3.15 billion, Lazada CEO Maximilian Bittner said, with management and Temasek Holdings Pte. remaining as the only other investors. Lazada backers Rocket Internet SE and Investment AB Kinnevik said on Wednesday they were among the sellers. The start-up’s previously disclosed backers also include British supermarket chain Tesco Plc.
Alibaba took control of Lazada last year from Rocket in a $1 billion deal—its largest overseas move to date. The company Bittner started in 2012 is now pivotal to quickening the Chinese online retailer’s forays abroad, fulfilling billionaire co-founder Jack Ma’s ambitions of becoming a truly global business.
Lazada’s home turf is shaping up to be the next battleground for Alibaba and main Chinese rival JD.com Inc., and Amazon.com Inc. down the road. While still lacking the transport and payments infrastructure crucial to the widespread adoption of e-commerce, the region has become the world’s fastest-growing Internet arena, with a populace of more than 600 million getting more comfortable with online shopping and payments. “Obviously this allows Alibaba to expand its global footprint, giving them unrivaled access to users,” Bittner said in an interview. “E-commerce penetration in Southeast Asia is only roughly 3%, so the partnership is a great step change.”