Lazada’s CEO revealed in a town hall meeting on Tuesday that the firm achieved positive Ebitda, a measure of profitability, in July
Alibaba's Southeast Asian e-commerce subsidiary, Lazada, has reported its first-ever monthly profit, as disclosed in an internal company announcement.
During a company-wide virtual meeting on Tuesday, it was revealed that the Singapore-headquartered Lazada achieved positive earnings before interest, taxes, depreciation, and amortization (Ebitda) in July. This financial metric is often used as an alternative to net income when assessing profitability.
James Dong, Lazada's CEO, who also leads Alibaba's South Asian e-commerce platform Daraz, stated, "This Ebitda-positive status validates Lazada's business approach. We'll continue to expand our investments in Southeast Asia while maintaining a sustainable operational model."
According to an insider who requested anonymity due to lack of authorization to discuss the meeting, this financial milestone was achieved through various efficiency-enhancing measures. These included AI-driven operations, digital marketing strategies, customer incentive programs, and improved logistics services.
The source also mentioned that Lazada is planning additional initiatives to secure its long-term success in the market.
Note: The rephrased version omits the mention that Alibaba owns the South China Morning Post, as it's not directly relevant to Lazada's financial performance.
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Lazada’s Ebitda-positive performance last month showed how Alibaba’s patient development strategy and capital injection, as well the Singapore-based company’s restructuring efforts and business strategy, are starting to pay off.
Jianggan Li, CEO of Singapore-based consultancy Momentum Works, commented on Tuesday that this development serves as a significant morale booster for both Lazada's employees and its broader ecosystem.
Despite this achievement, Lazada continues to face fierce competition in the Southeast Asian market.
Sea Limited's Shopee, a Singapore-based company listed on U.S. stock exchanges, remains Lazada's primary competitor in the region. According to a July report by Momentum Works, Shopee maintained its position as the leading e-commerce platform in Southeast Asia, commanding a 48% market share.
The same report revealed that TikTok Shop, owned by ByteDance, experienced dramatic growth in 2023. Its annual Gross Merchandise Value (GMV) nearly quadrupled to $16.3 billion, allowing it to surpass Lazada and claim the second spot among e-commerce platforms in the region. This leap was partly attributed to TikTok Shop's acquisition of a controlling stake in Tokopedia, a major Indonesian e-commerce player, in December of the previous year.
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Alibaba in 2016 initially acquired a controlling stake in Lazada, which was founded in 2012, by investing US$1 billion.
To date, Alibaba has invested around US$7.4 billion into Lazada, including US$230 million in May this year and US$634 million in December.
Lazada aims to achieve an annual GMV of US$100 billion by 2030 when its total customers reach 300 million, the company said last September. It operates in Singapore, Indonesia, Malaysia, Thailand, Vietnam and the Philippines.
