a E commerce In 2016 Alibaba ventured into Southeast Asia by acquiring a

A e commerce in 2016 alibaba ventured into southeast

This preview shows page 19 - 22 out of 54 pages.

a. E-commerce In 2016, Alibaba ventured into Southeast Asia by acquiring a controlling stake of Lazada for $1 billion (Cheok, 2018). This acquisition has allowed Alibaba to leverage on Lazada’s operating markets in Vietnam, Singapore, Malaysia, Thailand, Philippines and Indonesia. In its takeover, Alibaba has ameliorated Lazada’s technology, specifically on its algorithms and payment systems. To bolster its presence in the region, Alibaba pumped another $2 billion in Lazada in 2018 and has even appointed top executives to manage Lazada (CHEOK, 2018). Lazada’s main competitive advantage lies in its merchants, conferred to it by Alibaba’s expansive merchant base in China. Moreover, the RedMart acquisition further expanded Lazada’s offerings to include online grocery deliveries. Lastly, Lazada has its own delivery network, instilling immunity to third-party logistical price hikes (The Business Times, 2019). Being close competitors, both Shopee and Lazada have minimal differentiation in its offerings. Price and logistics incentives are used to attract users. ShopeeMall and LazMall compete in direct retail sales. Shopee’s China marketplace competes with Lazada’s Taobao collection.
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20 | P a g e T h i s i s a s a m p l e o n l y . © 2 0 2 0 , S i n g a p o r e U n i v e r s i t y o f S o c i a l S c i e n c e s . A l l r i g h t s r e s e r v e d . N o p a r t o f t h i s m a t e r i a l m a y b e r e p r o d u c e d i n a n y f o r m o r b y a n y m e a n s w i t h o u t p e r m i s s i o n i n w r i t i n g f r o m S c h o o l o f B u s i n e s s , S i n g a p o r e U n i v e r s i t y o f S o c i a l S c i e n c e s . BUS489 STRATEGY FOR BUSINESS Source: McKinsey & Company, Defending Southeast Asian consumer – company value in a digital age With competition intensifying in Southeast Asia’s e-commerce sphere, Shopee managed to achieve top spot in popularity based on view rates across the region. However, Lazada’s market share has been increasing as seen from a 13% increase in its Y-O-Y growth rate (SBR, 2020). Therefore, Shopee must step up to effectively compete with Lazada. b. Digital Entertainment Source: The Asean Post
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21 | P a g e T h i s i s a s a m p l e o n l y . © 2 0 2 0 , S i n g a p o r e U n i v e r s i t y o f S o c i a l S c i e n c e s . A l l r i g h t s r e s e r v e d . N o p a r t o f t h i s m a t e r i a l m a y b e r e p r o d u c e d i n a n y f o r m o r b y a n y m e a n s w i t h o u t p e r m i s s i o n i n w r i t i n g f r o m S c h o o l o f B u s i n e s s , S i n g a p o r e U n i v e r s i t y o f S o c i a l S c i e n c e s . BUS489 STRATEGY FOR BUSINESS Online gaming exploded in the region in recent years. A Newzoo research reveals that the region generated $4.6 billion of revenue in 2019, a 22% Y-O-Y increase from 2018 (Fernandes, 2019). While this approximates 3.1% of the global gaming market, there are almost no boundaries to its breakneck growth.
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