The battleground of e-commerce is shifting from Southeast Asia to Europe as domestic market growth slows. Alibaba-owned Lazada is preparing to enter the European market, potentially reshaping the regional e-commerce landscape.
Lazada's European Ambitions
With China's e-commerce market reaching saturation, major players including Alibaba, JD.com, and Pinduoduo are looking overseas for growth opportunities. The competition between Lazada and Shopee—backed by Alibaba and Tencent respectively—has been particularly fierce in Southeast Asia, and now appears set to extend to Europe. Meanwhile, established players like Amazon and emerging platforms such as TikTok are also targeting Europe as a strategic market.
Alibaba is accelerating its European expansion plans, with Lazada positioned as a key vehicle. The platform, which boasted 159 million monthly active users as of September 2021, aims to reach 300 million users by 2030. Alibaba acquired a controlling stake in Lazada in 2016 for approximately $1 billion. The recent setbacks faced by rival Shopee in Europe have presented new opportunities for Lazada.
Shopee's brief six-week foray into France before withdrawing operations suggests challenges in appealing to European consumers. In Poland, local platform Allegro has already established significant cross-border operations. For Alibaba to succeed in Europe, AliExpress alone may prove insufficient—the company will need support from brand merchants and quality local sellers. Lazada's marketplace model, similar to Alibaba's Tmall, could better meet this need.
Alibaba believes Lazada's European potential is bolstered by its logistics infrastructure, particularly the cargo hub at Liege Airport in Belgium. Cainiao, Alibaba's logistics arm, established what it describes as Europe's largest hub at the airport in November 2022, providing critical support for Lazada's operations.
Organizational Restructuring for Efficiency
European expansion presents significant challenges beyond market complexity. Leadership, organizational structure, and talent acquisition will prove crucial. While Lazada has demonstrated strong operational capabilities in Southeast Asia, strategic coordination with other Alibaba divisions has historically consumed substantial resources.
Following Alibaba's recent organizational reforms, Jiang Fan now oversees all international operations including AliExpress and Lazada, potentially improving decision-making and resource allocation. The company must address talent retention issues after several key executives departed in recent years, balancing internal development with external recruitment to maintain team expertise and innovation capacity.
Differentiated Strategy for European Market
Lazada plans to adopt a distinct approach in Europe compared to AliExpress, positioning itself as a local marketplace partnering with European traders rather than primarily sourcing from Chinese suppliers. James Dong, CEO of Lazada Thailand, will reportedly lead this initiative according to Reuters. This localization strategy aims to better address European market needs.
With slowing domestic growth, overseas expansion has become essential for Alibaba. The company faces intensifying competition from Pinduoduo and Douyin (TikTok) domestically, while Southeast Asian markets grow increasingly crowded. Although neither Alibaba nor Lazada has officially commented, international operations are clearly viewed as critical growth drivers. After being overtaken by Shopee in Southeast Asia, Lazada's European push represents Alibaba's new strategic move.
Lazada's entry will intensify competition in Europe's e-commerce sector. Whether the platform can leverage its Southeast Asian experience, Alibaba's resources, and localized strategies to establish itself—or even surpass established players like Amazon—remains to be seen. Europe's e-commerce landscape may face significant realignment, with Lazada potentially emerging as a disruptive force.