SINGAPORE — Alibaba Group Holding is set to launch an expansion drive in Southeast Asia to counter the challenge of regional newcomer Amazon.com.
The initiative comes on the back of fresh investment in Singapore-based e-commerce platform Lazada and will focus on combining online and physical stores.
James Dong, who was sent by Alibaba to become Lazada Thailand CEO this year, told the Nikkei Asian Review that the Chinese e-commerce leader will soon bring its “new retail” strategy to the region, which he says is key to its global competition with the U.S. rival.
Alibaba, which doubled its investment in Lazada earlier this year with $2 billion in additional capital, operates in much of the world but generated only 8% of its revenue from commerce outside China last fiscal year. Southeast Asia represents its largest foreign market, one where Alibaba operates in six countries through Lazada. Dong called the region “very important” for Alibaba’s global expansion.
In China, Alibaba has partnered with retailers like hypermarket chain RT-Mart, upgrading stores with e-payment systems, on-demand delivery and consumer data analysis.
Dong said in an interview in Bangkok that the retail model Alibaba will introduce to Southeast Asia “would be very similar to our play in China” and that “it should not be too long” until the launch of the first upgraded store. Thailand “will be a showcase to the rest of the region and the world,” he added.
Southeast Asia’s importance to Alibaba owes not only to the region’s geographic proximity to China but also to the nature of its shoppers.
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