Alibaba’s Lazada posts first EBITDA profit in July, allocates more investment TechNode

Alibaba’s Southeast Asia-focused retail unit Lazada posted its first monthly profit in July, CEO James Dong announced at an internal meeting on Tuesday, saying the company’s positive earnings before interest, taxes, depreciation, and amortization (EBITDA) “proves the effectiveness of Lazada’s business strategy,” a meeting participant told TechNode.

Why it’s important: The achievement could herald Lazada reaching sustainable profitability as parent Alibaba’s domestic performance falters. Alibaba is set to report its second-quarter results on Thursday.

Details: “Lazada will continue to increase investment in the Southeast Asian market under a sustainable operating model,” Dong said at the meeting, according to a participant.

• Lazada operates in Thailand, Singapore, Vietnam, Malaysia, Indonesia and the Philippines, and its Thailand branch was the first to achieve profitability in 2022.
• According to Alibaba’s annual report, parent company Alibaba does not disclose separate financial statements for businesses within its international digital commerce group, where revenue mainly comes from AliExpress, Trendyol and Lazada, which includes customer management, merchandising and logistics services.
• Alibaba said in its March quarter earnings report that Lazada’s loss per order narrowed significantly year-over-year during the period.

Context: E-commerce giant Alibaba has made at least ten investments in Lazada worth nearly $8 billion since 2016. The retailer’s established rivals, such as Shopee and TikTok Shop, are also planning to expand in the Southeast Asian region where Lazada operates.

• Ago, a budget-focused retail platform owned by PDD, entered the Thai market in August, a year after expanding into Malaysia and the Philippines.
• Earlier this year, hundreds of Lazada employees were laid off in a sweeping staffing shakeup that impacted employees at all levels, according to a CNBC report.

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