China based Alibaba Group Holding Ltd. to invest $1bn for control of Lazada Group. Alibaba will pay $500m for new shares and purchase an equal amount from existing investors. Investors selling their share include Germany’s Rocket Internet, British supermarket chain Tesco and Swedish investment company Kinnevik.
With the investment, Alibaba will add operations in 6 Southeast Asian markets – Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam – serving 256 million people. It is also Alibaba’s largest overseas investment till date.
Germany’s Rocket Internet said it will sell a 9.1 percent stake in Lazada for $137 million in cash and will keep remaining 8.8 percent stake. While British supermarket giant Tesco will sell an 8.6 percent equity stake in Lazada for $129 million, keeping 8.3 percent.
Regarding the deal Alibaba was advised by Credit Suisse and Goldman Sachs was financial adviser to Lazada.
About Lazada Group
Lazada is a privately owned Singapore based e-commerce company founded by Rocket Internet in 2011.
Lazada Group operated sites in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. It had raised approximately US$647 million over several investment rounds from its investors such as Tesco, Temasek Holdings, Summit Partners, JPMorgan Chase, Kinnevik and Rocket Internet.
Its site was launched in March 2012, with a business model of selling inventory to customers from its own warehouses. In 2013 it added a marketplace model that allowed third-party retailers to sell their products through Lazada’s site; the marketplace accounted for 65% of its sales by the end of 2014.
About Alibaba Group Holding Limited
Alibaba Group Holding Limited is a Chinese e-commerce company that provides consumer-to-consumer, business-to-consumer and business-to-business sales services via web portals. It also provides electronic payment services, a shopping search engine and data-centric cloud computing services.
The group began in 1999 when Jack Ma founded the website Alibaba.com, a business-to-business portal to connect Chinese manufacturers with overseas buyers.
As of June 2016 it employs 46,288 employees and had revenue of CN¥101.143bn($14.65bn) and CN¥71.289bn($10.32bn) as net income.