Several months after Alibaba increased its stake in Lazada from 51% to 83%, the Chinese multinational giant is consolidating its control over the Southeast Asian e-commerce company. Two senior Alibaba executives have joined Lazada’s technology team, the e-commerce firm revealed.
Chun Li, the former chief technology officer of Alibaba’s B2B division, joined Lazada last year to become the co-president of technology. Raymond Yang, another former Alibaba executive, joined the company as its new chief product officer.
Lazada recently announced the shutdown of its Moscow and Bangkok engineering centers and is moving a small number of staff to tech hubs in Shenzhen, China; Singapore; and Ho Chi Minh City, Vietnam.
According to two ex-employees who wish to remain anonymous, Lazada offered its 200-plus Moscow employees the chance to relocate to its remaining tech hubs. Majority of the employees declined, citing the low relocation offer. The relocation offers were made last week while the shutdown of the Moscow office was announced in October of last year. The employee departures are expected to be completed by May.
Lazada’s Bangkok staff were also offered relocation packages. It was not known how many Bangkok employees accepted the offer.
The technology, product, and business intelligence teams of Alibaba now “comprise colleagues from Lazada, with additions from Alibaba and a continuous inflow of new hires,” a Lazada spokesman said. He did not mention how many Alibaba employees joined Lazada’s team.
The firm’s Shenzhen tech hub is an indication of the company’s partnership and collaboration with Alibaba. The tech hub is located near Alibaba’s giant office center which is the size of 11 football fields.
Lazada vs. Shopee War Heats Up
E-commerce upstart Shopee is gearing up for a heated confrontation with Lazada. Shopee has started to stock products from Taobao sellers a few days ago (Lazada started selling Taobao products last year). The company didn’t say how it managed to bring Taobao sellers to its website. Some experts say that bringing in Taobao sellers to the Shopee marketplace may be costly for the company in the long run, since Shopee needs to offer big incentives to successful Taobao sellers to do business in its platform.
Just like Lazada, Shopee is not yet profitable. The startup made $9.3 million in revenue while spending $132 million in marketing for the fourth quarter of 2017. Shopee’s stock prices fell 10% after the latest financial figures for its parent company, Sea, were released. The group lost $252 million in the last quarter of 2017.
Other e-commerce rivals in the region, such as JD and Amazon, are investing in Singapore and Indonesia operations. Lazada, however, enjoys a massive regional presence that none of its competitors have. Alibaba’s vast logistic network will enable Lazada to boost its cross-border e-commerce prospects in a region with differing cultures and traditions.
Lazada’s dominance in Southeast Asia is far from certain, however. It will need to integrate Chinese and Southeast Asian cultures to fend off its rivals. With Shopee hot on its heels, Lazada cannot afford to rest on its laurels.
Source: Tech in Asia
