Alibaba Holding Group said it would invest an additional $2 billion in the Southeast Asian e-commerce company Lazada and selected a senior executive to manage the company. Lucy Peng, one of the founders of Ali Baba and a veteran executive, will be the CEO of Azada, replacing the founder of the company, Max Betner, who will become a senior adviser at Ali Baba. Alibaba’s stake will grow thanks to the new investment, but the percentage has not been disclosed. Before the investment, Alibaba had a 83% stake, which now totals $4 billion after Alibaba pumped $2 billion in the past two years.
“The investment highlights Alibaba’s confidence in the future success of Lazada’s activities and prospects for growth in the South East Asian market and is a key part of Alibaba’s global growth strategy,” the Chinese company said in a statement. The company’s new financing highlights the ambition of Alibaba World as it seeks to claim a bigger share of the fast-growing online shopping market, fueled by high liquidity and rising stock prices.
The online video streaming unit of China’s giant search engine, Baidu, launched a $2.4 billion IPO in New York, where proceeds will be used to expand the available content. The listing is expected to give the Yi Chi unit additional financial strength in the race with its rivals on the Chinese markets, such as Yoko Todo of the Alibaba Holding Group. The company said in a disclosure to the Securities and Exchange Commission in the United States that it will put 125 million shares at a price between 17 and 19 dollars. The holders of the issue can sell an additional 18.75 million shares and if the right is exercised in full, the value of the transaction will reach about $2.7 billion. Izhi Yi, whose shares will be listed on Nasdaq, said it expects to use about half of the proceeds to expand and consolidate the content, while 10 percent will be allocated to technology support and the rest will be directed to the company’s general purposes.
Baidu owns 80.5% and will remain the dominant shareholder after the offering will be complete. At the end of February, the number of subscribers reached 60.1 million, of which more than 98% paid for subscriptions.