Alibaba seeks to expand Southeast Asia subsidiary Lazada to Europe – sources

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SINGAPORE/SHANGHAI – Alibaba Group plans to expand its Southeast Asian subsidiary, Lazada, into Europe, two sources familiar with the matter told Reuters, as the Chinese e-commerce company seeks to continue its growth abroad in the context of a slowdown in opportunities at home.

The move comes months after Alibaba’s logistics arm Cainiao opened a central hub for European sales in Belgium.

Alibaba already has a presence in Europe through its global e-commerce platform, AliExpress, which primarily targets consumers looking for products from Chinese manufacturers such as smartphone accessories and clothing.

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Lazada plans to target local European suppliers, while AliExpress will continue to focus primarily on cross-border sales from China, one of the sources told Reuters. Lazada Thailand CEO James Dong will help lead the initiative, the person said.

Alibaba’s head of international trade, Jiang Fan, visited Singapore in April to discuss the expansion, the same source added.

Lazada and Alibaba did not immediately respond to Reuters requests for comment.

The sources did not specify which European countries Lazada intended to expand into. Details were being finalized, they said. They declined to be identified as they were not authorized to speak to the media.

In China, Alibaba has faced stiff competition from rivals such as Pinduoduo Inc and ByteDance subsidiary Douyin, while new regulations have limited scope for expansion.

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Lazada was founded in 2012 by German tech incubator Rocket Internet to become Southeast Asia’s answer to Amazon.com Inc. Alibaba acquired a majority stake for around $1 billion in 2016 in what was the Chinese company’s largest foreign contract at the time.

Alibaba said in December it had set targets for the Southeast Asian market of $100 billion in gross merchandise volume and 300 million users.

Lazada generated $21 billion in gross merchandise volume in the year to the end of September 2021 and had 159 million users, as competition intensified with its biggest rival Shopee, owned by Sea Ltd. .

Shopee itself has expanded globally, entering markets such as Poland, Spain and France last year. But it withdrew from India and France in March, facing weak growth prospects. (Reporting by Fanny Potkin in Singapore and Brenda Goh in Shanghai; Editing by Miyoung Kim and Bradley Perrett)

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