Quick Take: Alibaba Sweetens Stake in Online Mall Lazada With $1 Billion Add-On

Alibaba is paying $1 billion to boost its stake in Lazada Group, a Southeast Asian e-commerce platform, from 51% to around 83%, the two companies announced Wednesday.

The deal places Lazada’s valuation at $3.15 billion, more than double the company’s value in April 2016, when Alibaba Group Holding Ltd. first acquired a majority stake in the Singapore-based company. Last year’s deal was also worth approximately $1 billion.

Lazada is Southeast Asia’s largest online marketplace, with over 100,000 sellers and users in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. “The e-commerce markets in the region are still relatively untapped,” Alibaba CEO Daniel Zhang said. “We see a very positive upward trajectory ahead of us.”

Only 3% of Southeast Asia’s retail sales are made online. E-commerce accounted for 10% of retail sales last year in Alibaba’s home market of China, according to the country’s Ministry of Commerce.

The Chinese e-commerce giant has lately been eyeing consumers in Southeast Asia, announcing two weeks ago that it plans to launch its Tmall World platform in Singapore and Malaysia.

In April, former Alibaba affiliate Ant Financial Services Group, which operates the Alipay service, merged with Lazada’s payments arm, HelloPay. HelloPay’s services in Singapore, Malaysia, Indonesia and the Philippines were absorbed into the Alipay brand.

Lazada will still operate under its own brand after Alibaba’s latest purchase.

Contact reporter Teng Jing Xuan (jingxuanteng@caixin.com)