One of Alibaba’s biggest overseas bets struggles to become profitable

Alibaba’s south-east Asian online shopping venture Lazada has appointed its fourth chief executive in under three years as it struggles to become profitable and battles increasing competition… The move is the latest leadership change at Lazada, one of Alibaba’s biggest overseas bets after it bought a controlling stake in the online retailer in 2016 for close to $1 billion. The Chinese technology group has now invested more than $4 billion in total into the Singapore-headquartered business, which was founded in 2012 and operates in six countries in south-east Asia including Malaysia, Indonesia, Thailand and Vietnam. Alibaba owns 98 per cent of the equity in the company… The lossmaking Lazada is grappling with a familiar and well-financed competitor in the form of Shopee, the ecommerce arm of Sea Group which is backed by Alibaba’s arch rival Tencent. Sea Group has a market capitalisation of nearly $50 billion and its profitable gaming arm means it has plenty of financial firepower to back Shopee, which is outpacing Lazada across a number of south-east Asian markets. Competition has become especially fierce in Indonesia, south-east Asia’s biggest economy and most important market, and where both Lazada and Shopee have spent heavily to win market share not only from each other but also from local ecommerce start-ups Tokopedia and Bukalapak. 

Mercedes Ruehl