Alibaba pays $1billion for Rocket Internet’s Lazada

In a bid to expand and penetrate South-East Asia’s e-commerce sector, China’s Alibaba has paid about 1 billion dollars to scoop controlling shares in Lazada, an e-Commerce company founded in 2011 by Rocket Internet.

This includes $500 million in newly-issued equity capital, as well as the purchase of existing shares from Lazada shareholders.  While Rocket Internet abdicated 9.1% stake for $137 million, Tesco and Kinnevik sold 8.6% for $129 million and 3.8% for $57 million respectively.

This transaction is expected to help brands and distributors around the world that already do business on Alibaba’s platform, as well as local merchants, to access the Southeast Asian consumer market.

Oliver Samwer, CEO of Rocket Internet, commented: “This transaction is a key milestone for Lazada as it underlines its position as leading online platform in South-East Asia. Alibaba as the new major shareholder is further strengthening this position and provides the basis for significant future growth given Alibaba’s strong strategic position in the region. We are looking forward to working with Alibaba and the existing Lazada shareholders to support Lazada in building the leading ecommerce franchise in South East Asia.”

Maximilian Bittner, CEO of Lazada added, “we are very excited about joining forces with Alibaba and see significant synergies that will drive great benefits to our customers, sellers, brands and the broader eCommerce ecosystem in Southeast Asia. The transaction will help us to accelerate our goal to provide the 550 million consumers in the region access to the broadest and most unique assortment range.”

“Globalization is a critical strategy for the growth of Alibaba Group today and well into the future,” said Michael Evans, President of Alibaba. “With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China, a proven management team and a solid foundation for future growth in one of the most promising regions for eCommerce globally. This investment is consistent with our strategy of connecting brands, distributors and consumers wherever they are and support our ecosystem expansion in Southeast Asia to better serve our customers.”

Lazada which is now valued at 1.5 billion dollars is present in key South-East Asian markets including Indonesia, Singapore, Thailand, the Philippines, and Vietnam.