China's largest e-commerce company unveiled
its vision Friday for its Southeast Asian e-commerce arm Lazada in presentation
slides uploaded to its site for its annual Investor Day, where it typically
shares revenue figures and future strategies of its business units with
investors. Alibaba's top executive Daniel Zhang also outlined its carbon
emission goals during a presentation Friday.
The plan to quintuple Lazada's total gross
merchandise volume — defined as the total amount of sales transacted on its
platform — came as the Chinese company looked overseas for sources of growth
amid increased competition and a slowing economy in the Chinese market.
Alibaba also eventually aims to have Lazada
serve 300 million consumers, according to the presentation slides.
The Hangzhou-based firm took a controlling
stake in Lazada in 2016, before investing an additional $2 billion to expand
the business in 2018.
Alibaba's incoming chief financial officer
Toby Xu said during a presentation on Friday that its China commerce segment
has faced “near-term challenges of a slowing macro-environment and a heightened
level of competition.”
“This has resulted in slower GMV and the
revenue growth in the most recent quarter,” he said. “But we also see
opportunities to tap into new addressable markets to grow new users that will
position us well for the long term.”
Currently, Lazada's gross merchandise
volume for the last twelve months from September 2021 reached $21 billion, with
159 million monthly active users.
Alibaba CEO Daniel Zhang said in a separate
presentation Friday that the company sees a “huge potential in the
international markets” going forwards.
“In Southeast Asia, ecommerce penetration
is only 11%, and Lazada's annual consumers have reached only 34 percent of
regional Internet users,” Zhang said. “There's tremendous potential in both the
overall market size and our penetration.”
Alibaba's push to expand its Southeast Asia
business comes as it faces fiercer competition in its home market, from rivals
in short-video e-commerce such as Kuaishou, as well as group buying platform
Pinduoduo, which has invested heavily in sales and marketing expenses to expand
its user base.
The company has also faced tighter
regulatory scrutiny over the past year, as Chinese authorities increased
regulatory oversight in the technology industry following concerns that some
Big Tech companies were engaging in anti-competitive and monopolistic behavior.
Alibaba was fined a record $2.8 billion earlier this year after authorities
concluded that it had violated antitrust rules.
Separately Friday, Zhang also announced
that the company is aiming to achieve carbon neutrality in its own operations
by 2030, while also reducing the amount of emissions across its supply chain
and business ecosystem by half.
Zhang said that the company also plans to
reduce emissions by using more renewables as well as “energy-saving and
efficiency-improving technologies” to reduce emissions.
Alibaba would also mobilise consumers,
merchants, business partners and service providers to take part in their carbon
reduction efforts. Zhang named examples such as promoting the consumption of
green products, green transportation options and encouraging the reuse and
resale of pre-owned goods.
Alibaba's pledge towards reducing its
carbon footprint also coincides with China's big push to achieve carbon
neutrality by 2060. The country is currently the world's biggest carbon
emitter, responsible for nearly a third of global emissions.
Chinese authorities have since placed
energy targets on many of the country's state-owned firms, although most have
struggled to wean themselves off coal consumption – one of the biggest
contributors to China's massive carbon emissions.