Alibaba’s Lazada posts first monthly profit amid intense competition in Southeast Asia

Amjad Ali August 13, 2024

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Lazada, the Southeast Asian online shopping platform of Alibaba Group Holding, has achieved a monthly profit for the first time, according to an internal announcement.

In an announcement during the firm’s town hall meeting on Tuesday, Singapore-based Lazada was said to have recorded positive earnings before interest, taxes, depreciation and amortisation (Ebitda) – an alternate measure of profitability to net income – in July. Alibaba owns the South China Morning Post.

“This Ebitda-positive status proves the effectiveness of Lazada’s business strategy, and Lazada will continue to increase investment in the Southeast Asian market under a sustainable operating model,” company chief executive James Dong said in the meeting that was live-streamed to all of the firm’s employees. Dong also serves as chief executive at Daraz, Alibaba’s South Asian e-commerce platform.

That milestone was reached through various measures to improve efficiency, including artificial intelligence-enabled operations, online marketing, user incentives and optimised logistics services, according to a person familiar with the matter.

The person, who declined to be identified for having no authority to speak about the internal meeting, said Lazada plans other initiatives that would help ensure long-term success.

Lazada operates in Singapore, Indonesia, Malaysia, Thailand, Vietnam and the Philippines. Photo: Shutterstock

Lazada’s Ebitda-positive performance last month showed how Alibaba’s patient development strategy and capital injection, as well the Singapore-based company’s restructuring efforts and business strategy, are starting to pay off.

“This is a morale boost for Lazada team members, as well as its ecosystem,” Jianggan Li, chief executive of Singapore-based consultancy Momentum Works, said in an online commentary on Tuesday.

Lazada, however, continues to face stiff competition in Southeast Asia.

Its biggest rival in Southeast Asia is Shopee, a platform operated by Sea Limited, a Singapore-based firm listed in the US. Shopee remained the region’s top e-commerce platform with a 48-per cent market share, according to a report by Momentum Works in July.

Lazada expects to hit 300 million customers by 2030. Photo: Shutterstock

Lazada aims to achieve an annual GMV of US$100 billion by 2030 when its total customers reach 300 million, the company said last September. It operates in Singapore, Indonesia, Malaysia, Thailand, Vietnam and the Philippines.

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Amjad Ali August 13, 2024

0 1 1 minute read