Alibaba News: Giant Chinese Retailing Company Buys Controlling Stake of Lazada
Alibaba, the giant Chinese retailing company, has announced that it will acquire a controlling stake of the Singaporean e-commerce startup Lazada Group for a price around $1 billion.
According to a report, Alibaba's acquisition of Lazada will pave the way for the former to tap into the latter's logistics backbone.
"Globalization is a critical strategy for the growth of Alibaba Group today and well into the future," said Alibaba President Michael Evans, as reported by Wall Street Journal.
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Alibaba has been using its $3.7 billion in free cash flow as it draws a bead on expanding the business online, making it more profitable with more efficient logistics, and ensuring that its presence is felt through media exposures not only in China but abroad. And for Alibaba, the best way to achieve it is to acquire Lazada, thanks to its popularity in the Southeast Asian shoppers.
Apart from Alibaba, other Chinese companies have also been in the process of acquisition of foreign companies as business growth in China starts to slow down. Just last year, Alibaba, along with Foxconn Technology Group and SoftBank Group Co., invested in Snapdeal.com, an Indian e-commerce startup. Two years ago, Alibaba also bought a minority share of Singapore's main postal service for the purpose of creating an international e-commerce logistics business.
According to Alibaba, its investment on Lazada is made up of $500 million newly issued equity capital by Lazada and shares from existing shareholders, bringing it to a total of $1 billion.
"The transaction will help us to accelerate our goal to provide the 560 million consumers in the region access to the broadest and most unique assortment of products. Furthermore, leveraging Alibaba's unique knowhow and technology will allow us to rapidly improve our services and provide an even more effortless shopping and selling experience," said CEO of Lazada Group, Max Bittner.
Lazada offers a wide array of products online, ranging from clothing to consumer electronics and is popular to Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam online shoppers.
