A Chinese e-commerce company the Alibaba Group has bought the Rocket Internet’s Lazada. It has agreed to buy a US$1 billion controlling stake in Lazada, the fastest growing online department store that’s billed as Alibaba’s counterpart in Southeast Asia.

Jack Ma – founder and executive chairman of Alibaba Group -ibtimes.com

Lazada sells a wide range of products – from clothing to consumer electronics – in Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

In the company’s statement, Alibaba said the investment consists of US$500 million newly issued equity by Lazada and shares from existing investors – for a total of US$1 billion.

Max Bittner, CEO of Lazada Group said “Southeast Asia is an attractive mobile-driven consumer market that is highly fragmented and diverse with significant barriers to entry and a nascent modern retail sector that has large headroom for growth.”

Max Bittner, CEO of Lazada Group – photo teknologi.metrotvnews.com

Bittner said “The transaction will help us to accelerate our goal to provide the 560 million consumers in the region access to the broadest and most unique assortment of products. Furthermore, leveraging Alibaba’s unique knowhow and technology will allow us to rapidly improve our services and provide an, even more, effortless shopping and selling experience.”

Jack Ma – founder and executive chairman of Alibaba Group photo – mirror.co.uk

The arrangement incorporates a procurement for Alibaba to secure a great part of whatever is left of the Lazada stake “at honest worth amid the 12 to 18 month period after the end of the transaction.”

A press release from Rocket brought up that the company still has an 8.8 percent stake in Lazada after the arrangement. It has made a 15-fold return on its US$20.5 million interest in Lazada.

Lazada has netted a sum of around US$700 million in uncovered subsidizing throughout the years, basically from Kinnevik Investment, Temasek, Tengelmann Ventures, and Verlinvest, and Summit Partners. – Robert Beerlak