- Alibaba Group Holding Limited's (NYSE:BABA) hunt for overseas growth is critical to offset sluggish demand at home by expanding in Europe through its Southeast Asian offshoot, Lazada, Reuters reports.
- Lazada plans to target local European vendors, while Alibaba's existing global platform, AliExpress, will continue to focus mainly on cross-border sales from China.
- However, the Chinese e-commerce giant may struggle to justify the investment with a less than 5% European market share and hard-core rivals like Amazon.com Inc (NASDAQ:AMZN).
- Despite taking control of Singapore-based Lazada in 2016, alongside global tie-ups, domestic commerce revenue still made up 67% of its total sales in the six months ended in September, versus 7% from abroad, according to Reuters.
- In 2021, AliExpress had just a 4% market share in Western Europe, far behind Amazon's 20%. In Eastern Europe, its 5% share also trails Russia's Wildberries and Poland's Allegro.
- Revenue growth at Lazada in Southeast Asia slowed from a triple-digit pace a year earlier to 52% in the December quarter, as rivals like the Sea Limited (NYSE: SE)-owned Shopee win market share.
- Analysts see Alibaba reporting revenue of just 199 billion yuan ($29.8 billion) in the quarter to March, a record low 6% increase from a year earlier.
- The Covid-19 lockdowns in Shanghai and other major cities have hit consumer spending. The total transactions on Alibaba's Tmall retail site in April fell 13% year-on-year.
- Price Action: BABA shares traded lower by 0.10% at $82.39 on Wednesday.
