Lazada, Alibaba Group’s Southeast Asian e-commerce platform, has hit a pivotal moment in its journey. In July, for the first time in its history, the company reported a monthly profit—a signal that its strategic maneuvers might finally be paying off. The news, first reported by the South China Morning Post, was shared internally on August 13 during a town hall meeting, where CEO James Dong announced that Lazada had achieved a positive earnings before interest, taxes, depreciation, and amortization (EBITDA).
“This EBITDA-positive status proves the effectiveness of Lazada’s business strategy,” Dong said during the meeting, which was live streamed to employees across the region. The company has honed in on operational efficiency, deploying artificial intelligence to streamline processes, optimizing its logistics network, and sharpening its online marketing strategies.
This profitability comes as Lazada navigates an increasingly competitive Southeast Asian market. Shopee, operated by Singapore-based Sea, continues to lead the region’s e-commerce landscape with a market share that has remained steady at just over 48% in 2023, according to a report by research firm Momentum Works.
The real shift in the market, however, has come from TikTok Shop. Owned by ByteDance, TikTok Shop aggressively expanded, nearly quadrupling its market share and became the second largest player in the region after securing a majority stake in Indonesian platform Tokopedia. This rapid growth has chipped away at the dominance of both Shopee and Lazada.
Despite these pressures, Lazada’s recent success indicates that Alibaba’s significant investment in the platform—totaling approximately USD 7.7 billion since 2016—may be beginning to yield returns. Notably, this includes a USD 230 million cash injection in May and an additional USD 634 million last December, underlining Alibaba’s commitment to its Southeast Asian arm.
Looking forward, Lazada has set its sights on ambitious targets. The company aims to expand its customer base to 300 million and achieve an annual gross merchandise volume (GMV) of USD 100 billion by 2030. Operating across six countries—Singapore, Indonesia, Malaysia, Thailand, Vietnam, and the Philippines—Lazada’s roadmap is clear, but the path is fraught with challenges.
The journey to profitability has not been without its hurdles. Earlier this year, Lazada underwent workforce reductions, a part of broader restructuring efforts to streamline operations. As Lazada positions itself for future growth, its ability to maintain profitability while navigating the competitive and volatile e-commerce landscape will be crucial.
This milestone also holds significant implications for Alibaba, which is grappling with slowing growth in its domestic market. As Alibaba prepares to release its second-quarter earnings, Lazada’s performance could emerge as a key component of Alibaba’s broader international strategy, offering a potential boost in regions where growth prospects are still robust.