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MANILA, Philippines – Chinese online retail giant Alibaba announced Tuesday, April 12, that it will buy a $1 billion controlling stake in Lazada, one of the largest online retailers in Southeast Asia.
Lazada sells a wide range of products – from clothing to consumer electronics – in Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.
In the company’s statement, Alibaba said the investment consists of $500 million newly issued equity capital by Lazada and shares from existing shareholders – for a total of $1 billion.
“Southeast Asia is an attractive mobile-driven consumer market that is highly fragmented and diverse with significant barriers to entry and a nascent modern retail sector that has large headroom for growth,” said Max Bittner, CEO of Lazada Group.
“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.”
The deal includes a provision for Alibaba to acquire much of the rest of the Lazada stake “at fair market value during the 12 to 18 month period after the closing of the transaction.”
Lazada has netted a total of around $700 million in disclosed funding over the years, primarily from Kinnevik Investment, Temasek, Tengelmann Ventures, and Verlinvest, and Summit Partners. – With reports from TechInAsia / Rappler.com