Alibaba Group Holding Ltd is spreading its wings further into South Asia by acquiring the region's largest e-commerce platform.
he buyout of Daraz Group, for an undisclosed amount, will make the company a wholly owned unit of Alibaba, following in its footsteps of recent purchases in shopping portals and digital wallets across the region. "We are excited for Daraz to become a part of the Alibaba ecosystem," said Alibaba Chief Executive Officer Daniel Zhang. "Together with Daraz, we can now empower entrepreneurs to better serve consumers in the region through our technology and expertise."
Zhang said the Daraz team is a natural fit, sharing Alibaba's values and beliefs that long-term economic development in the region will depend on a technology-enabled commerce ecosystem. Founded in 2012, Pakistan-based Daraz sells an array of products from consumer goods to electronics online. The retailer offers multiple payment options including cash-on-delivery, and is active in Bangladesh, Myanmar, Sri Lanka and Nepal.
"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. Daraz said its acquisition by Alibaba would help drive further growth in its key markets, home to 460 million people, 60 percent of them younger than 35.
Pakistan's burgeoning youth has presented a great opportunity for Daraz, with the market projected to grow 8.2 percent a year through 2021 amid rising disposable incomes, according to data from Euromonitor International. Alibaba is also penetrating into Southeast Asia, after topping up investment in Lazada that gives it control of the well-known Southeast Asian online shopping platform.
Ant Financial Services Group, Alibaba's financial arm, also struck deals earlier this year to back Pakistan's fintech firm Telenor Microfinance Bank, as well as team up with Bangladesh's payment platform bKash. "Alibaba's strings of acquisitions are a vote of confidence in the region," said iResearch analyst Li Chao. "The Belt and Road Initiative impacts almost all crucial markets where Alibaba is making strides into, and it's likely that businesses will benefit from the investments now," he noted. Alibaba's revenue from international business, which includes Lazada and AliExpress, grew 94 percent year-on-year in the fiscal year ended March 2018.