## Alibaba’s Lazada Goes After European Luxury Brands to Dominate Southeast Asian E-commerce
Alibaba Group Holding (BABA) is intensifying its efforts to conquer the Southeast Asian e-commerce market through its international division, Lazada. In a bid to outmaneuver competitors like Sea Ltd’s Shopee, ByteDance’s TikTok, and PDD Holdings Inc’s PDD, Lazada is actively courting top European fashion and design brands.
The Chinese e-commerce giant’s international arm is setting its sights on a massive $100 billion e-commerce volume by 2030, positioning itself as a major player in the competitive Southeast Asian market. To achieve this ambitious goal, Lazada executives, including Chief Business Officer Jason Chen, recently held a high-profile event in Milan, meeting with over 100 Italian luxury brands, including the likes of Armani, Dolce & Gabbana, and Ferragamo.
Lazada’s recent success is evident in its financial performance. In July 2024, the division achieved a significant milestone by becoming EBITDA positive, a testament to its focus on AI-driven operations and improved online marketing strategies. This achievement was backed by a substantial $7.4 billion investment from Alibaba.
While Alibaba’s international commerce retail business shows promising growth, with a 38% increase in the first quarter to $3.26 billion, its domestic market faces headwinds. Alibaba is grappling with an intense price war with its domestic rivals and geopolitical tensions with the US, which continue to hinder its growth prospects.
Despite these challenges, Wall Street analysts remain optimistic about Alibaba’s future. The average 12-month price target for BABA stock stands at $107.27, with a high target of $130.0 and a low target of $85.0. Of all the analysts covering Alibaba, a majority (9) have positive ratings, with 2 maintaining neutral ratings and no negative ratings.
This optimistic outlook suggests that analysts believe Alibaba’s strong international growth potential, particularly through Lazada’s expansion, will eventually overcome its domestic challenges. As Lazada continues to attract top European brands and expand its reach in Southeast Asia, Alibaba’s global e-commerce ambitions are poised to gain further momentum.
