Alibaba Plans to Grow Southeast Asia E-Commerce Arm Lazada to $100 Billion


Alibaba this week announced an ambitious plan to increase its Southeast Asian e-commerce business to $100 billion (about Rs 7,60,140 crore) in transaction sales, as well as a pledge to reach carbon neutrality in its operations by 2030. vision revealed.

China’s largest e-commerce company on Friday unveiled its vision for its Southeast Asian e-commerce arm Lazada In a presentation slide uploaded to its site for its annual Investor Day, where it shares revenue figures and future strategies of its business units with investors in general. Alibaba’s top executive Daniel Zhang also outlined its carbon emissions targets during a presentation on Friday.

Lazada’s plan to reduce its overall gross trading volume – defined as the total amount of sales on its platform – will be reduced when the Chinese company looks overseas for sources of growth amid increased competition and a slowing economy in the Chinese market. Was being

Alibaba According to the presentation slides, Lazada aims to eventually serve 300 million consumers.

The Hangzhou-based firm took a controlling stake in Lazada in 2016, before investing an additional $2 billion (about Rs 15,200 crore) to expand the business in 2018.

Alibaba’s incoming chief financial officer Toby Xu said during a presentation on Friday that its China commerce segment faces “near-term challenges of a slowing macro-environment and elevated levels of competition.”

“This has resulted in slower GMV and revenue growth in the most recent quarter,” he said. “But we also see opportunities to tap into new addressable markets to develop new users that will position us well for the long term.”

Currently, Lazada’s gross trading volume for the last twelve months since September 2021 has reached $21 billion (approximately Rs 1,59,630 crore) with 159 million monthly active users.

Alibaba CEO Daniel Zhang said in a separate presentation on Friday that the company sees “huge potential in international markets” going forward.

“In Southeast Asia, e-commerce penetration is only 11%, and Lazada’s annual users reach only 34 percent of regional Internet users,” Zhang said. “There is tremendous potential in both overall market size and our penetration.”

Alibaba’s push to expand its Southeast Asia business comes as it faces competition from rivals in its home market such as Kuaishou for short-video e-commerce, as well as from group buying platform Pinduoduo, which has focused on sales and marketing. Has invested heavily in expenses. Expand your user base.

The company has also faced tough regulatory scrutiny over the past year, as Chinese authorities increased regulatory oversight in the technology industry, following concerns that some Big Tech companies were engaging in anti-competitive and monopolistic behavior. Alibaba was fined a record $2.8 billion (about Rs 21,300 crore) earlier this year after officials concluded it had violated antitrust rules.

Separately on Friday, Zhang also announced that the company is aiming to achieve carbon neutrality in its own operations by 2030, as well as reducing the amount of emissions in its supply chain and business ecosystem by half. Is.

Zhang said the company also plans to reduce emissions by using more renewable energy as well as “energy-saving and efficiency-improving technologies” to reduce emissions.

Alibaba will also mobilize consumers, merchants, business partners and service providers to participate in their carbon reduction efforts. Zhang cited examples such as promoting the consumption of green products, promoting green transportation options, and encouraging the reuse and resale of pre-owned goods.

Alibaba’s pledge to reduce its carbon footprint also coincides with China’s big push to achieve carbon neutrality by 2060. The country is currently the world’s largest carbon emitter, accounting for about a third of global emissions.

Chinese officials have since set energy targets on many of the country’s state-owned firms, though most have struggled to reduce their consumption of coal – one of the biggest contributors to China’s massive carbon emissions.