📈 Lazada Reaches Profitability
Lazada, Alibaba’s Southeast Asian e-commerce unit, reported its first-ever positive Ebitda in July 2024. This achievement was shared by Lazada's CEO, James Dong, in an internal meeting. This profitability highlights the effectiveness of Lazada's strategic initiatives in a highly competitive region. Alibaba has been focused on expanding its international sales as growth in China slows, making this milestone significant for the company’s broader goals.
💼 Strategic Investments Pay Off
Earlier this year, Alibaba noted that Lazada's loss per order had decreased substantially due to better monetization and reduced logistics costs. The company has continuously invested in Southeast Asia, aiming to capture a larger share of the market. Despite these investments, Alibaba’s international e-commerce division, which includes Lazada, posted an adjusted Ebitda loss of $1.12B in the last fiscal year. This recent profitability at Lazada is a step in the right direction.
🛒 Competition in Southeast Asia
Lazada, headquartered in Singapore, operates across six Southeast Asian markets. The region is known for fierce competition, with major players like Sea’s Shopee and Amazon vying for market share. While Shopee saw a 10% increase in global monthly active users in the first half of 2024, Lazada experienced a 12% decline. Despite this, Lazada aims to serve 300M customers by 2030, demonstrating Alibaba's long-term commitment to the region.
📊 Looking Ahead
Alibaba, which acquired a controlling stake in Lazada in 2016, has been working to replicate its domestic success in international markets. The recent profitability in Lazada could signal that these efforts are starting to pay off. Investors will be keen to see how this success impacts Alibaba's upcoming financial results, which are due on Thursday. With revenue for the international division rising by 45% in the March quarter to $3.8B, there is cautious optimism about future growth.
Can Alibaba maintain Lazada's profitability amidst tough competition?
