Alibaba acquires Daraz in estimated $200 million deal

KARACHI: Chinese ecommerce giant Alibaba acquired Pakistan-based leading online retailer Daraz Group for an estimated $150 to $200 million a couple of months after it announced a multibillion rupees investment in acquisition of 45 percent stake in a local financial service, industry officials said on Tuesday.

The officials said this would be a second investment in online space in a row, which would develop the local ecommerce market and attract other foreign investors in the country, which is witnessing growth in ecommerce.

Berlin-based tech incubator Rocket Internet said Alibaba Group acquired the entire share capital of South Asian ecommerce platform Daraz Group for an undisclosed amount. Daraz also operates online marketplaces in Bangladesh, Myanmar, Sri Lanka and Nepal. It was founded in 2012 in Pakistan, and has since grown into the most popular online shopping destination in the country.

Spokesperson of Daraz Group Saman Javed said the group head office would remain in Pakistan. Alibaba would make investment according to its own standards and technology, Javed added.

Bjarke Mikkelsen, co-chief executive officer of Daraz said the group has found its natural home in the Alibaba family with this transaction “and we are proud to carry our part of the mission to make it easy to do business anywhere”.

“With hard work and dedication we have started the e-commerce journey in our markets, but we have still only scratched the surface of the potential,” Mikkelsen added.

In March, Ant Financial Services Group, an affiliate of Chinese e-commerce giant Alibaba, agreed to acquire 45 percent stake worth around Rs20 billion in a subsidiary of Norwegian Telenor to broaden access to financial services through digital payment solutions in Pakistan.

Ecommerce players are also seeing the entry of a global leading online and mobile payment platform as a good omen for the market where 90 percent of online orders of Rs9.8 billion were still fulfilled using cash-on-delivery in the past fiscal year.

Umair Mohsin, a program manager at the state-funded National Incubation Centre said the entry of Chinese group is a good omen for Pakistan’s technology ecosystem.

“They are expected to make investment in building the online shopping market,” Mohsin whose incubation centre initially allocated six million dollars to provide seed funding to startups.

Daniel Zhang, chief executive officer of Alibaba Group, said the company is excited for Daraz to become a part of the Alibaba ecosystem.

“Together with Daraz, we can now empower entrepreneurs to better serve consumers in the region through our technology and expertise,” Zhang said.

“In Daraz, we found a great team that espouses our values and believes that a technology-enabled commerce ecosystem will play a critical role in driving the long term economic development in South Asia.”

The five South Asian markets in which Daraz is operating have a combined population of over 460 million, 60 percent of which are under the age of 35.

Daraz will continue to operate under the same brand following the transaction.

Oliver Samwer, chief executive officer of Rocket Internet said the sale of Daraz to Alibaba is another testament to Rocket Internet´s ability to successfully scale and exit market-leading companies.

“Leading technology and a strong logistics network have helped creating one of the fastest growing companies in the region,” Samwer said. “The acquisition by Alibaba is a tremendous success for the entire team working at Daraz.”</s>Chinese e-commerce giant Alibaba said today it had purchased leading Pakistani online retailer Daraz, continuing its overseas expansion by gaining a foothold in the growing South Asian consumer market. The move came after Alibaba announced in March a doubling of its investment in Southeast Asian e-commerce firm Lazada.

China is seeking closer economic ties with Asian neighbours including Pakistan through its Belt and Road initiative, a strategy to increase trade links that is led primarily by infrastructure projects. Daraz, founded in 2012, was purchased from Rocket Internet, a Berlin-based incubator of online startups.

Its key markets are Pakistan, Bangladesh, Sri Lanka, Myanmar and Nepal, claiming 30,000 sellers and 500 brands on its platform, according to a statement by Alibaba. Products available on Daraz include consumer electronics, household goods, beauty, fashion, sports equipment and groceries, it said.

Daraz said the acquisition would help further growth in its main markets, adding that they were home to 460 million people, 60 percent of whom were under the age of 35. Alibaba CEO Jack Ma has also been investing in research into advanced technologies such as driverless cars and artificial intelligence.

The New York-listed firm added 98 million active consumers over the year ended March 31, to a total of 552 million using its e-commerce marketplaces.</s>Online marketplace, which launched in Pakistan in 2012, will continue to operate under the same branding

Leading Chinese eCommerce company Alibaba Group has acquired the entire share capital of South Asian eCommerce platform Daraz Group for an undisclosed amount, according to incubator Rocket Internet.

Daraz, founded in Pakistan in 2012, has since grown into the most popular online shopping destination in the country and currently also operates marketplaces in Bangladesh, Myanmar, Sri Lanka and Nepal.

According to Rocket, the five South Asian markets in which Daraz is operating have a combined population of over 460 million, with 60% of them under the age of 35, suggesting great growth potential.

“The sale of Daraz to Alibaba is another testament to Rocket Internet´s ability to successfully scale and exit market-leading companies,” says Oliver Samwer, CEO of Rocket Internet. “Leading technology and a strong logistics network have helped creating one of the fastest growing companies in the region. The acquisition by Alibaba is a tremendous success for the entire team working at Daraz,” he added.

Daraz will continue to operate under the same brand following the transaction.</s>Jack Ma is expanding his reach in Pakistan, striking a deal for Alibaba Group Holding Ltd. to buy Rocket Internet SE-backed online retailer Daraz.

Financial details weren’t disclosed on the deal, which will see Alibaba take control of an online retailer that sells everything from fashion to electronics. Daraz is also active in Bangladesh, Myanmar, Sri Lanka and Nepal.

Pakistan’s burgeoning youth has turned the nation into a fast-growing consumer market of more than 200 million people. That presents a growth opportunity for Daraz with the market forecast to expand 8.2 percent a year through 2021 amid rising disposable incomes, according to Euromonitor International.

The deal comes just a couple months after Ant Financial, which is controlled by Ma, decided to buy a 45 percent stake in Telenor Microfinance Bank for $184.5 million to further develop mobile payments and digital financial services.</s>China’s biggest e-commerce company, Alibaba Group, broke into the Pakistani market on Tuesday by fully acquiring Daraz Group.

 “With the acquisition, Daraz will be able to leverage Alibaba’s leadership and experience in technology, online commerce, mobile payment and logistics to drive further growth in the five South Asian markets that have a combined population of over 460 million, 60% of which are under the age of 35,” said a press release by Daraz.

 Founded in Pakistan in 2012, Daraz has since expanded in Bangladesh, Myanmar, Sri Lanka and Nepal. It will continue to operate under the same brand, said the press release. Hailing the move, Daraz Co-CEOs Bjarke Mikkelsen and Jonathan Doerr said that there is still a long way to go on the e-commerce journey. “We have still only scratched the surface of the potential,” they said.

 Daniel Zhang, CEO of Alibaba Group, said: “Together with Daraz, we can now empower entrepreneurs to better serve consumers in the region through our technology and expertise.

 In Daraz, we found a great team that espouses our values and believes that a technology-enabled commerce ecosystem will play a critical role in driving the long term economic development in South Asia.”

 The Alibaba group has been for some time trying to enter the Pakistani market. Last year, it signed a memorandum of understanding (MoU) with the Ministry of Commerce and had been in talks with Daraz since at least earlier this year.</s>Alibaba has bought Pakistani e-commerce firm Daraz, as the Chinese tech giant looks to increase its presence in South Asia.

Financial details of the transaction, which was announced on Tuesday, were undisclosed.

Daraz, founded in 2012, is backed by European tech incubator Rocket Internet. It operates in Bangladesh, Myanmar, Sri Lanka and Nepal as well as Pakistan.

The deal marks another foray for billionaire entrepreneur Jack Ma's Alibaba into the South Asian market. The e-commerce titan invested in India's popular payment app Paytm in 2015.

"Together with Daraz, we can now empower entrepreneurs to better serve consumers in the region through our technology and expertise," Alibaba CEO Daniel Zhang said in a statement Tuesday.

Daraz will continue to operate under the same brand, Rocket Internet said in a statement.</s>China’s e-commerce giant, Alibaba has made its entry into Pakistan by acquiring one of the country’s biggest e-commerce companies, the Daraz Group.

According to a PTI report: With the acquisition, the Jack Ma-led group has also expanded in four other South Asian markets Bangladesh, Myanmar, Sri Lanka and Nepal, where Daraz has its presence.

This is said to be the first ever investment by Alibaba in Pakistan. However, no figures were provided either by Daraz or Alibaba.

According to a press release issued by Daraz, they will leverage Alibaba’s leadership and experience in technology, online commerce, mobile payments and logistics to drive further growth in five South Asian markets.

Founded in 2012 in Pakistan, the Daraz Group has expanded to Myanmar, Bangladesh, Sri Lanka and Nepal and had been serving a combined population of over 460 million, 60 percent of which are under the age of 35.

It will continue to operate under the same brand, the release said.

Hailing the move, Daraz Co-CEOs Bjarke Mikkelsen and Jonathan Doerr said that there is still a long way to go on the e-commerce journey.

CEO of Alibaba Group, Daniel Zhang said in the release: “Together with Daraz, we can now empower entrepreneurs to better serve consumers in the region through our technology and expertise.

“In Daraz, we found a great team that espouses our values and believes that a technology-enabled commerce ecosystem will play a critical role in driving the long term economic development in South Asia.”

The Alibaba Group had last year signed a memorandum of understanding with Pakistan’s Ministry of Commerce to enter into its market.</s>[HONG KONG] Chinese fashion-focused e-commerce platform Meili Inc is seeking US$500 million in an initial public offering targeted for the second half of this year, people with direct knowledge told Reuters.

Meili, created through a 2016 merger between online fashion retailer Meilishuo and rival Mogujie, has mandated Morgan Stanley to lead the listing together with Credit Suisse and China Renaissance, the people said.

The company, which was valued at around US$3 billion at the time of the merger, will go public in the United States, according to two of the people, who declined to be named as the information is confidential.

Meili Inc did not respond to Reuters' requests for comment. The three banks declined to comment.

The float will add to a busy pipeline of Chinese tech companies that are seeking to go public this year, including smartphone maker Xiaomi and on-demand online services provider Meituan Dianping.

Most of the biggest deals are expected to take place in Hong Kong under new rules in the city designed to attract more tech and biotech IPOs, as competition for new floats heats up between Hong Kong, New York and the Chinese mainland.

But one of the sources said Meili still favours a US listing as the company, which is not yet profitable, believes US investors will be more familiar with its e-commerce business model, as e-commerce giants such as Amazon, Alibaba and JD.Com are all listed there.

Meilishuo, which means "beauty talk" in Chinese, and Mogujie, or "Mushroom Street", both started out as online marketplaces and social sites targeting female consumers, highlighting and promoting items such as clothes, shoes, skincare products and handbags.

They evolved into shopping sites similar to Alibaba's Taobao and merged in January 2016 to create a fashion services group including a platform for internet celebrities and models, and its own fashion brand.

Mogujie, established two years later by a former Alibaba executive, counts Ping An Ventures, a venture capital arm of Chinese insurer Ping An Insurance Co., Hillhouse Capital and Hopu Investment Management as investors.
Chinese retailer Alibaba acquires Pakistani online marketplace Daraz for an estimated US$150–200 million.