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Another day, another move by Alibaba to extend its presence in Southeast Asia.
Ecommerce firm Lazada Group, which is majority-owned by Alibaba, announced this week that it would roll out aspects of Alibaba’s consumer-to-consumer (C2C) marketplace Taobao to Indonesia, Thailand and the Philippines. (Earlier this year, the company launched the Taobao brand via Lazada in Singapore and Malaysia.)
Lazada will host a “store-in-store” called the Taobao Collection on the various versions of its site operated in the three countries. Consumers shopping the Taobao Collection will get access to millions of products sold by China-based merchants, but the goods made available will be curated from Taobao’s wider—and seemingly limitless—inventory, with local tastes in mind. At the same time, they will also draw items from Alibaba’s business-to-consumer (B2C) platform Tmall.
Alibaba appears to be leaning on Lazada’s established brand in the region as a way to introduce consumers in Southeast Asia to its Taobao juggernaut. According to data from drew the largest number of page views among B2C retail sites in Indonesia, Thailand, Singapore, Malaysia and Vietnam in December 2016.
More recently, ecommerceIQ, again citing figures from SimilarWeb, found that Lazada Indonesia’s site visits outnumbered its competitors by a significant margin in April 2017.
Alibaba’s success wouldn’t have been possible without Taobao, which rose to prominence in China in the early 2000s by giving the country’s budding entrepreneur class a platform through which to connect with its emerging consumer class. Alibaba also smartly edged out foreign marketplaces, such as eBay, by undercutting them on the transactional fees it imposed on both Taobao’s buyers and sellers.
Now Alibaba is taking the infrastructural model of payments processing, logistics and other services, and exporting it to markets in Southeast Asia that are at a similar level of development to China’s from roughly five years ago.
“This is a true testament to the way the Lazada and Alibaba teams have come together to build the business in a fast and efficient way, combining consumer insights, technology know-how and local expertise,” said Aimone Ripa di Meana, Lazada’s chief marketplace officer.
Alibaba has acted quickly to capitalize on its June 2017 move to invest roughly $1 billion to expand its majority stake in Lazada, increasing its share to 83%, up from 51%.
Alibaba made a similarly aggressive move in Indonesia in August 2017, announcing it was leading a $1.1 billion investment round in Tokopedia, one of the country’s leading ecommerce platforms.
That makes sense given Indonesia’s potential for ecommerce growth. eMarketer estimates the country will have 36.2 million digital buyers this year, with that figure hitting 73.9 million by 2021. Retail ecommerce sales in Indonesia are expected to grow from $8.21 billion to $18.07 billion over the same period.
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