Alibaba’s Lazada wants Armani, D&G to help hit $100 billion goal

Alibaba Group Holding Ltd.’s Lazada is courting top European fashion and design brands to help fend off Asian rivals and eventually reach its goal of $100 billion in e-commerce volume by 2030.

Executives met this week in Milan with founders and managers of more than a hundred Italian brands interested in tapping Southeast Asia through LazMall Luxury, a recently launched platform. Those included Armani, Dolce Gabbana, Ferragamo and Tod’s, Chief Business Officer Jason Chen told Bloomberg News.

That courtship is one aspect of a campaign to try and fend off Sea Ltd.’s Shopee, ByteDance Ltd.’s TikTok and PDD Holdings Inc. in a Southeast Asian online commerce arena expected to reach $186 billion by 2025. TikTok and Shopee in particular have vied fiercely for merchants and shoppers in key markets from Indonesia to Singapore.

“Lazada is ready to ramp up as entering this new phase of e-commerce development, where profitability, commercialization and long-term gains are priorities for the business,” Chen said in an online Zoom interview. “The current push to broaden our luxury segment will further fuel these efforts as we reinforce our brand positioning.”

Lazada and AliExpress are at the heart of Alibaba’s business outside China, now among its fastest-growing divisions because of an economic downturn back home.

Alibaba, which under new management is recovering from a years-long crackdown on its business by Beijing, is now driving expansion in the Asian region. One of its biggest rivals there is Sea, which in August raised its retail sales outlook in a sign it’s making headway in that market. 

High-end demand is key to Alibaba’s effort, Chen said. Along with India and the Middle East, Southeast Asia is regarded as one of the world’s faster-growing markets for luxury, especially as China grapples with a sagging economy.

Unlike rivals, Lazada can offer brands more control over pricing and marketing, he argued. Alibaba’s Tmall Luxury Pavilion, created in 2017 and now a repository for some 200 brands, offers a template for Lazada, Chen said.

“When a company decides to open its own online store on our platform, it manages all the operations, from pricing to logistics,” he said. “This is particularly important for the fashion houses, which are keen to keep control of the entire selling process.”