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Alibaba Shakes up Lazada Leadership

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Alibaba injecting $2.0 billion more into Lazada

An Alibaba (BABA) co-founder is taking up the role of running Lazada, the Southeast Asia–focused e-commerce platform that Alibaba controls. In addition to being Lazada’s chairman, Lucy Peng will assume the role of CEO. Lazada’s outgoing CEO, Max Bittner, will join Alibaba Group as a senior advisor.

Peng is one of Alibaba’s 18 founders. She is expected to steer Lazada toward more growth. Alibaba’s shakeup of Lazada’s leadership coincided with it injecting additional funds in the business. Alibaba plans to invest an additional $2.0 billion in Lazada to accelerate growth. Lazada is Southeast Asia’s largest e-commerce platform.

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$4.0 billion invested in Lazada

Alibaba acquired control of Lazada in 2016 after investing $1.0 billion in the business. It made another $1.0 billion investment in the business in 2017 and subsequently raised its stake in Lazada to 83%. With the additional $2.0 billion cash injection, Alibaba will have invested $4.0 billion in Lazada. Investing in Lazada fits into Alibaba’s global strategy, and that strategy goes beyond spreading its e-commerce.

First cloud data center in India

Alibaba’s global push has seen the company acquire or back startups in fields such as mobile payments and online gaming. In India, for instance, Alibaba controls Paytm, an e-commerce and mobile payment provider.

Last year, Alibaba announced that it was opening its first cloud data center in India. The race for dominance of India’s cloud computing market has pitted Alibaba against Amazon (AMZN) and Microsoft (MSFT), which are also investing significantly in the country. In 2017, Microsoft teamed up with eBay (EBAY) and Tencent (TCEHY) to raise $1.4 billion for Flipkart, a leading e-commerce player in India. Alibaba’s cloud business generated $553 million in revenue during the company’s fiscal 3Q18 (December 2017 quarter).

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