Lazada Reportedly Gets Additional Funds of IDR 12,6 Trillion from Alibaba

After obtaining fresh funds $353 million (around Rp.5,2 trillion) last April, Lazada reportedly received another $845 million (around Rp.12,6 trillion) in additional funding from Alibaba.

Reporting from Bloomberg, this information is contained in a report that the company sent to regulators in Singapore on Wednesday (19/7). The funding will be used to strengthen Lazada's e-commerce business in Southeast Asia.

With this latest investment, Alibaba has injected billions of US dollars into Lazada. Since its founding in 2012, Lazada Group has raised hundreds of millions of US dollars from various investors, including some of the world's largest technology companies.

Lazada was acquired by Alibaba for $1 billion in 2016. In 2017, the company secured $1,1 billion in a round led by Alibaba and Temasek for a total of over $3 billion raised.

In 2022, Alibaba announced the separation (spin off) Lazada becomes a separate entity. This decision was driven by several key factors, including becoming more independent and focused. Alibaba is working to push Lazada for more autonomy and independence in pursuing a growth path in the Southeast Asian market.

Lazada's spin-off strategy has also allowed them to strengthen their business in Southeast Asia and consolidate their position as a major player in the global e-commerce landscape. This step is also considered capable of making Lazada to compete better with regional competitors.

Strengthen position in Southeast Asia

Alibaba has again provided funding to Lazada in order to outperform players currently dominating the market in Southeast Asia, namely Sea Group through Shopee. Lazada's position in the Indonesian e-commerce market is constrained by a number of factors, including competitors, limited locality, and an unattractive user experience.

The success of Shopee and Tokopedia in Indonesia can be attributed to their seller-focused approach, and effective marketing strategies. To regain momentum and improve its position in the Indonesian market, it is deemed necessary to prioritize locality efforts, improve the online shopping experience, support sellers and order fulfillment services.

Leveraging its affiliation with the Alibaba Group, Lazada is also considered to be able to gain a significant market share and compete more effectively against Shopee and Tokopedia.