Alibaba Group Holdings' Southeast Asian online shopping platform Lazada has achieved its first monthly profit, according to an internal company announcement. The Singapore-based company said its earnings before interest, tax, depreciation and amortization (EBITDA), an alternative profitability measure to net profit, turned positive in July, according to an announcement at the company's town hall meeting on Tuesday. Alibaba owns the South China Morning Post. “This positive EBITDA is a testament to the effectiveness of Lazada's business strategy, and Lazada will continue to increase investment in the Southeast Asian market under a sustainable operating model,” the company's CEO James Dong said in the meeting, which was livestreamed to all employees. Dong is also CEO of Daraz, Alibaba's South Asian e-commerce platform.
The milestone was achieved through a range of efficiency-boosting measures, including artificial intelligence-enabled operations, online marketing, user incentives and optimized logistics services, a person familiar with the matter said.
The person, who declined to be identified as he was not authorized to discuss internal meetings, said Lazada is planning other initiatives that will help ensure its long-term success.
Lazada operates in Singapore, Indonesia, Malaysia, Thailand, Vietnam and the Philippines. Photo: Shutterstock
Lazada's EBITDA positive performance last month indicates that Alibaba's patient development strategy and capital infusions, as well as the Singapore-based company's restructuring efforts and business strategy, are starting to pay off.
“This is a morale booster for Lazada team members and its ecosystem,” Jiang Gan Li, chief executive officer of Singapore-based consulting firm Momentum Works, said in an online commentary on Tuesday.
However, Lazada still faces stiff competition in Southeast Asia.
Its biggest rival in Southeast Asia is Shopoo, a platform run by US-listed, Singapore-based Sea Limited. Shopoo remains the largest e-commerce platform in the region with 48% market share, according to a July report from Momentum Works. Lazada expects to reach 300 million customers by 2030. Photo: Shutterstock
Lazada said in September last year that it aims to achieve an annual gross merchandise volume of US$100 billion by 2030, when its total customer base will reach 300 million. The company operates in Singapore, Indonesia, Malaysia, Thailand, Vietnam and the Philippines.
