Thursday, December 1 2022

Alibaba this week revealed an ambitious vision to grow its e-commerce business in Southeast Asia to $100 billion in sales, along with a commitment to achieve carbon neutrality in its operations by 2030.

China’s largest e-commerce company on Friday unveiled its vision for its Southeast Asian e-commerce arm, Lazada, in presentation slides uploaded to its site for its annual Investor Day, where it usually shares insights. revenue figures and future strategies of its business units with investors. Alibaba’s top executive Daniel Zhang also outlined his carbon emissions targets during a presentation on Friday.

The plan to quintuple Lazada’s total gross merchandise volume – defined as the total amount of sales made on its platform – came as the Chinese company looked overseas for sources of growth amid heightened competition. and economic slowdown in the Chinese market.

Alibaba also ultimately aims for Lazada to serve 300 million consumers, according to the presentation slides.

The Hangzhou-based company took a majority stake in Lazada in 2016, before investing another $2 billion to expand the business in 2018.

Alibaba’s new chief financial officer, Toby Xu, said in a presentation on Friday that its China commerce segment faces the “near-term challenges of a slowing macro environment and an increased level of competition. “.

“This resulted in slower GMV and revenue growth over the last quarter,” he said. “But we also see opportunities to tap into new addressable markets to develop new users that will position us well over the long term.”

Currently, Lazada’s gross merchandise volume for the last twelve months from September 2021 has reached $21 billion, with 159 million monthly active users.

Alibaba CEO Daniel Zhang said in a separate presentation on Friday that the company sees “tremendous potential in international markets” in the future.

“In Southeast Asia, e-commerce penetration is only 11%, and Lazada’s annual consumers reached only 34% of regional netizens,” Zhang said. “There is huge potential both in overall market size and in our penetration.”

Alibaba’s drive to expand its business in Southeast Asia comes as it faces stiffer competition in its home market from short-video e-commerce rivals such as Kuaishou, as well as of group buying platform Pinduoduo, which has invested heavily in sales and marketing spend to expand its user base.

The company has also come under tougher regulatory scrutiny over the past year as Chinese authorities have stepped up regulatory oversight in the tech industry following concerns that some Big Tech companies are engaging in anti-competitive behavior. and monopolistic. Alibaba was fined a record $2.8 billion earlier this year after authorities found it violated antitrust rules.

Separately, on Friday, Zhang also announced that the company aims to achieve carbon neutrality in its own operations by 2030, while halving the amount of emissions in its supply chain and business ecosystem.

Zhang said the company also plans to reduce emissions by using more renewable energy as well as “energy-saving and efficiency-enhancing technologies” to reduce emissions.

Alibaba would also mobilize consumers, merchants, business partners and service providers to participate in their efforts to reduce carbon emissions. Zhang cited examples such as promoting the consumption of green products, eco-friendly transportation options, and encouraging the reuse and resale of second-hand goods.

Alibaba’s commitment to reducing its carbon footprint also coincides with major efforts by China to achieve carbon neutrality by 2060. The country is currently the world’s largest carbon emitter, responsible for almost a third global broadcasts.

Chinese authorities have since set energy targets for many of the country’s state-owned companies, although most have struggled to wean themselves off coal consumption – one of the biggest contributors to China’s massive carbon emissions.

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