Alibaba’s Lazada unit posts positive EBITDA in July

By Tracy Qu

Alibaba Group’s Southeast Asian e-commerce unit Lazada turned a little profitable last month, a promising sign for the tech giant as it seeks to boost international sales amid slowing growth in China.

Lazada’s monthly earnings before interest, taxes, depreciation, and amortization turned positive for the first time in July, according to a person with direct knowledge of the matter, the unit’s chief executive officer, James Dong, made the announcement at an internal meeting on Tuesday.

Dong told employees that the change was proof of the effectiveness of Lazada’s business strategy and that the unit would continue to actively invest in Southeast Asia, the source said.

Alibaba said earlier this year that Lazada’s loss per order narrowed significantly, helped by improved monetization and lower logistics costs.

Alibaba does not disclose financial data for Lazada, a key unit of its fast-growing international e-commerce division. In the latest fiscal year, the international e-commerce division posted an adjusted Ebitda loss of 8.035 billion yuan, or $1.12 billion, up from a loss of 4.94 billion yuan a year earlier, mainly due to increased investment, Alibaba said in its annual report.

In the quarter ended in March, revenue for the unit, which also owns other e-commerce brands such as AliExpress, Trendyol, Alibaba.com and Daraz, rose 45% from a year earlier to 27.45 billion yuan, or about $3.8 billion, while Alibaba posted overall growth of 7%.

Singaporean company Lazada, which operates in six Southeast Asian markets and aims to serve 300 million customers by 2030, has competed with the likes of Sea, Amazon and TikTok Shop since it was founded in 2012. Alibaba acquired a controlling stake in 2016, making several changes to its CEO as it seeks to replicate its wild domestic success in markets outside China.

Lazada faces fierce competition in Southeast Asia from Amazon and Singapore-based Sea, owner of e-commerce app Shopee. Shopee saw a 10% year-over-year increase in global monthly active users in the first half of 2024, while Lazada fell 12%, according to market data firm Sensor Tower.

Alibaba is scheduled to report its June quarter results on Thursday.

Write to Tracy Qu at [email protected]

(END) Dow Jones Newswires

August 13, 2024, 00:43 ET (04:43 GMT)