Alibaba-controlled Lazada Readies Itself To Battle Amazon

Southeast Asia-focused eCommerce startup Lazada, which Alibaba purchased a controlling stake in last year, may soon face some stiff competition from eCommerce giant Amazon.

For now, eMarketer pointed out, Lazada Group dominates the eCommerce activity and web traffic in the markets it serves, which includes mainly in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Last December, Lazada’S online properties attracted the largest number of page views among B2C retail sites in Thailand, Indonesia, Singapore, Malaysia and Vietnam, data from SimilarWeb confirmed.

However, eCommerce estimates point to an expected growth by double digits for online B2C spending in Southeast Asia through 2020, which is sure to attract more competitors for Lazada.

Amazon is reportedly considering a launch in Southwest Asia sometime this year, eMarketer stated, starting with Singapore.

Chinese companies are also setting their sights on Southeast Asia as a new market for growth, especially considering the region is home to nearly 620 million people.

According to a report last year by The Wall Street Journal, companies like Alibaba, Tencent, Didi Chuxing and JD.com, are expanding in Southeast Asia, moving beyond the slowing economy in China.

WSJ noted Alibaba and Tencent have led deals with a value of $1 billion combined to expand their businesses in Southeast Asia, which is the third-largest region for technology mergers and acquisitions by Chinese technology companies in 2016. The deal values combined were $1.9 billion compared to $193 million in the year earlier, WSJ reported, citing data from Dealogic. What’s more, industry watchers said in the report they think that investments on the part of Chinese tech companies will accelerate next year.

“What we have learned in China, we can apply the fastest in Southeast Asia,” Poshu Yeung, Tencent’s vice president of its international business, said in the report. “Everything in Southeast Asia, particularly in Indonesia, you will experience a pretty good growth rate.”

EMarketer is projecting that the number of smartphone users will surpass 257 million by 2020, presenting a big opportunity for companies. What’s more, the incomes in the region are growing at the same time smartphone ownership is, noted the report.