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Alibaba (BABA) aims to grow Lazada’s sales to $100bn

By Capital.com News

09:06, 17 December 2021

Lazada logo on a smartphone
Alibaba aims to grow Lazada’s sales four-fold and corner more than a third of the Southeast Asia e-commerce market – Photo: Alamy

Chinese e-commerce giant Alibaba aims to grow the total sales of its Southeast Asian marketplace Lazada fivefold to $100bn by catering to the region’s 300 million customers.

In a presentation by Lazada Group CEO Chun Li during Alibaba’s investor conference this week, the firm outlined its long-term vision.

The plans to ramp up its presence in Southeast Asia comes amid increasing regulatory scrutiny of technology firms in China, Alibaba’s home market.

Growing Southeast Asian market

If Alibaba achieves the goal with Lazada it will corner well over a third of the Southeast Asian e-commerce market, where sales are expected to grow to $260bn by 2025, according to Alibaba.

According to a recent report by Google, Temasek, and Bain & Co, Southeast Asia’s digital economy is set to reach $1trn by 2030, driven by the growth in the e-commerce sector.

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The report said the e-commerce sector in Southeast Asia is expected to reach $120bn in sales by the end of 2021, and by 2025 sales are set to reach $234bn.

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Much smaller than competitors

Singapore-based Lazada has grown its marketplace sales to $21bn as of September 2021 by increasing its active consumer base by 1.8 times to 130 million between March 2020 and September 2021.

Alibaba’s data showed that it remains far behind Singapore-based rival Sea’s Shopee, which is the sixth-largest e-commerce platform by sales in the world. Lazada, on the other hand, is the 12th largest e-commerce platform by global sales.

Read more: Digital economy in Southeast Asia to reach Read more: Digital economy in Southeast Asia to reach $1trn by 2030trn by 2030

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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