Alibaba Group will invest a further US$2 billion (S$2.6 billion) into Singapore-based e-commerce company Lazada, and Ms Lucy Peng - one of Alibaba's 18 co-founders and current chairman of Lazada - will take over as chief executive officer of Lazada.
Alibaba said yesterday that this latest move is part of the group's effort to accelerate the region's e-commerce development, and will "deepen Lazada's integration into the Alibaba ecosystem".
The latest funding will double Alibaba's total investment in Lazada to US$4 billion (S$5.3 billion).
In 2016, Alibaba acquired control of Lazada with an investment of US$1 billion, and boosted its stake to 83 per cent last year with an additional investment of US$1 billion.
Ms Peng, a senior partner at Alibaba and executive chairman at payments affiliate Ant Financial, said that South-east Asia is a hot spot for growth and exciting opportunities. "With a young population, high mobile penetration and just 3 per cent of the region's retail sales currently conducted online, we feel very confident to double down on South-east Asia.
"Lazada is well-positioned for the next phase of development and of Internet-enabled commerce in this region," Ms Peng said.
BRIGHT REGIONAL PROSPECTS
With a young population, high mobile penetration and just 3 per cent of the region's retail sales currently conducted online, we feel very confident to double down on South-east Asia.
MS LUCY PENG
Lazada founder Max Bittner, who has served as CEO since 2012, will take on the role of senior adviser to Alibaba to "assist in the transition and future international growth strategy".
Lazada, founded in 2012 and incubated by Berlin-based Rocket Internet, is also backed by Temasek Holdings and Tesco.
Maybank Kim Eng senior economist Chua Hak Bin said that Alibaba's big investment suggests that South-east Asia is becoming the next battleground for global technology giants.
He noted that while the region's consumers will benefit from greater price competition and choice, traditional retail players will face an even greater risk of disruption and displacement.
"Many local bricks-and-mortar retail names do not have the deep wallets or tech know-how to compete.
"Local players will have to find their niche and partner the global tech titans to survive the coming onslaught," he said.
Mr Paul Coutts, CEO of Singapore Post, which is backed by Alibaba, said that any investment of a significant magnitude will accelerate the growth of e-commerce in Singapore and the region.
"We continue to focus on initiatives that unlock the full potential of the e-commerce market that these investments create, to advance SingPost's transformation into a leading postal and e-commerce logistics company," he said.