Alibaba pushes further into Southeast Asia
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Alibaba pushes further into Southeast Asia

Chinese Ecommerce titan Alibaba is making a concerted effort to own the Southeast Asian online retail space. The company has announced the acquisition of Daraz, an online marketplace that covers Pakistan, Bangladesh, Sri Lanka, Myanmar, and Nepal. The purchase comes just two years after Alibaba bought the regions number one name in Ecommerce, Lazada, and it has a number of other business interests too: it runs Redmart in Singapore, and has stakes in Paytm (India) and Tokopedia (Indonesia).

Alibaba’s share price has appreciated by 17% in the last 30 days

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Source: Yahoo Finance

Daraz is a sizeable startup which covers 460 million people in 5 markets. 60% of those people are under 35. And while the online retail scene in these markets is still small compared to their overall retail market, that means they have plenty of room to grow. According to some analysts, Pakistan is the world’s largest untapped Ecommerce market, and is set to see its online retail sector grow from $100 million in 2015-16 to more than $1 billion in 2017-18.

Osman Hussein, a tech analyst who previously worked at the online technology publication TechCrunch, told reporters:

“Pakistan is one of the last remaining Ecommerce markets which offers unfulfilled potential. Alibaba’s acquisition of Daraz is a vote of confidence in South Asia; China’s One Belt, One Road (OBOR) project impacts all markets where Daraz is present and it’s likely that small businesses across Asia will benefit from this move. It’s a bit sad to see Rocket Internet exit Asia, but there’s no doubt exciting times ahead.”

Disclosure
Dominion holds Alibaba in its Global Trends Ecommerce Fund.


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