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Alibaba deepens investment in SEA by acquiring Pakistan’s e-commerce firm Daraz

Amazon’s (AMZN) top rival Alibaba (BABA) is aggressively expanding its influence in Southeast Asia. This time, the master of e-commerce in China, has acquired an e-commerce portal from Pakistan, ‘Daraz’, that boasts of serving more than 500 million customers.

Jack Ma-led Alibaba is serious about its global expansion and sees Southeast Asia (SEA) as a thriving region and also a key part of its global expansion strategy. The big daddy of e-commerce will have to battle it out with its arch-rival JD.com, who is also working on strengthening its presence in the SEA market. JD had recently invested in Tiki.vn, a Vietnam-based e-commerce company.

Picture Courtesy: Hinglish Notes

In 2017, SEA witnessed an unprecedented growth. A strong economy and growing young population in the SEA is driving growth in the region. According to Frost & Sullivan, Southeast Asia market is expected to be one of the leading regions for e-commerce revenue and despite the challenges the SEA e-commerce market is expected to cross $25 billion by 2020.

Alibaba was the first major company to enter the SEA market where the shopping habits of the users are heavily based on mobiles. The Chinese e-commerce behemoth invested in an Indian payment app, ‘Paytm’, nearly three years ago. And this year, the company pumped an additional $2 billion in online mall Lazada. In fact, the company aims at building a logistic center in Thailand, further deepening its investment in SEA market.

In its latest move, the company has gobbled Daraz from Pakistan that has its business running in other SEA regions like Nepal, Bangladesh, Myanmar and Sri Lanka. Founded in 2012, the e-commerce company is backed by Rocket Internet, the most notorious incubator based in Berlin. Post the deal, Daraz, which is currently under the leadership of Bjarke Mikkelsen, will retain its brand name. Financial details of the deal remain undisclosed.

“Together with Alibaba, we are ready to empower entrepreneurs in the region and to fulfill our promise to offer our customers the best selection of products with a high-level of convenience,” said Daraz Co-CEO Jonathan Doerr in a statement.

Alibaba also eyes Bangladesh as last month reports stated that Ant Financial, Alibaba’s financial arm, is purchasing 20% stake of bKash, a Bangladeshi mobile financial services provider.

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