Alibaba sets ambitious US$100b GMV goal for Lazada

[SINGAPORE] Alibaba Group Holding has unveiled ambitious objectives for its South-east Asian arm Lazada, accelerating an overseas expansion to offset Chinese economic and regulatory headwinds.

The Chinese e-commerce leader is targeting a long-term goal of quintupling gross merchandise value (GMV), the sum of transactions across Lazada's platforms, to US$100 billion, Alibaba outlined in a presentation to investors. It wants Lazada to serve more than 300 million users eventually, according to a slideshow posted on its website.

Lazada, which Alibaba took over in 2016, is the Chinese corporation's main e-commerce business in the booming South-east Asian market. Its importance has grown since Beijing launched a sprawling effort to curb the influence of internet giants, spurring the likes of Alibaba and Tencent Holdings to ramp up their international businesses.

The WeChat operator, which is grappling with a gaming clampdown at home, this month launched a global publishing arm to group A-list titles under 1 umbrella.

Lazada has grown its GMV to about US$21 billion over the past 12 months, after enlarging its active consumer base by 1.8 times to 130 million from March 2020 through September. That's a ways behind its chief rival in the region, Sea's Shopee, which operates in South-east Asia and Taiwan and reported more than US$56 billion of transactions over the 4 quarters to the end of September.

The Alibaba subsidiary is now the third-largest online retailer in emerging markets by GMV, behind Mercado Libre but ahead of South Korea's Coupang and India's Flipkart, according to the presentation.

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Lazada, Shopee and fellow internet giants like Grab Holdings and Goto are riding an upswell of South-east Asian online commerce, which Alibaba says is growing about 27 per cent annually on average.

Tencent-backed Sea raised its forecast for annual e-commerce revenue last month for a second time this year, underscoring how the pandemic continues to drive online spending. South-east Asia's internet economy is set to double to US$363 billion by 2025, research from Google, Temasek and Bain & Co shows.

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