Thursday, February 22, 2024

Alibaba Wants Lazada to Hit $100 Billion in Southeast Asia

Alibaba acquired a majority share in Lazada in 2016, and invested $2 billion to expand the firm in 2018. Aiming to exceed $100 billion in transacted sales (approximately Rs 7,60,140 crore) by 2030, Alibaba announced this week. In slides posted on its website for its annual Investor Day, Alibaba shared its plans for Southeast Asia e-commerce arm Lazada with investors. In a Friday presentation, Alibaba’s CEO Daniel Zhang laid out its carbon emission targets.

As a result of growing competition and a weakening economy in China, Lazada decided to expand its business worldwide. According to the slides, Alibaba wants Lazada to serve 300 million customers. The Hangzhou-based company acquired a majority ownership in Lazada in 2016 and invested $2 billion (approximately Rs 15,200 crore) in 2018.

China commerce business has encountered “near-term challenges of a weakening macro-environment and increased competition,” according to new CFO Toby Xu. According to him, this has resulted in a decrease in GMV and revenue growth. We also believe that new customers can gained by reaching out to new markets.

With 159 million monthly active users, Lazada’s gross merchandise volume hit $21 billion (approximately Rs. 1,59,630 crore) in September 2021. “Huge potential” exists in international markets, said Alibaba CEO Daniel Zhang on Friday.
Lazada’s annual consumers represent only 34% of area Internet users, according to Zhang. “Both the market size and our penetration have huge potential.”

Southeast Asia

Alibaba drive into Southeast Asia comes as it confronts increased competition from short-video e-commerce rivals like Kuaishou and group buying platform Pinduoduo, which has substantially spent in sales and marketing to grow its user base.

Chinese authorities boosted regulatory control in the technology industry last year, concerned that some Big Tech companies were engaging in anti-competitive and monopolistic activities. A record $2.8 billion (roughly Rs. 21,300 crore) antitrust penalties has imposed on Alibaba earlier this year.

Announcing Friday that the corporation aims to achieve carbon neutrality in its own operations by 2030, while halving emissions across its supply chain and business environment. More renewable energy sources and “energy-saving and efficiency-improving technologies” have also planned, Zhang said.

And they’ll get help from their friends and family to reduce their carbon footprint. Zhang cited increasing green product consumption, green transportation, and reusing and reselling used goods as examples.

Alibaba’s vow to reduce its carbon footprint aligns with China’s ambitious carbon neutrality goal of 2060. Moreover the country now emits the most carbon, roughly a third of worldwide emissions.

Many state-owned enterprises in China have now been given energy objectives, but most have struggled to reduce their reliance on coal, a major source to China’s vast carbon emissions.

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