Alibaba's (BABA) Lazada Appoints Pierre Poignant as New CEO

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Alibaba Group Holding Limited BABA appointed Pierre Poignant as the new chief executive officer (CEO) of its Southeast-Asian e-commerce holding company, Lazada. Poignant will succeed Lucy Peng, one of Alibaba's co-founders, nine months after her appointment as CEO.

Poignant is also one of Lazada's co-founders and was previously responsible for expanding the company's logistics footprint, administering customer service and managing supply chain functions. He was appointed Lazada's group executive president in August 2018.

Alibaba currently owns 91% of Lazada after the e-commerce juggernaut invested an extra $2 billion in Lazada Group in March, per Reuters.

Coming to price performance, Alibaba's shares have lost 12.1% on a year-to-date basis against the industry 's rally of 2.5%.

Changing Leadership at Alibaba & Lazard

Alibaba witnessed significant changes in its leadership in 2018.

In September, founder of this Chinese online retail giant, Jack Ma announced that he will step down as chairman in 2019 to "focus on philanthropy and education", passing on the leadership to Daniel Zhang.

Peng was appointed as the CEO of Lazard in early 2018, replacing Maximilian Bittner. During her tenure, Alibaba and Lazard introduced a remarkable feature, which enables customers to snap any object using the app. Thereafter, the picture instantly displays information about the product and similar products along with their prices.

Alibaba Group Holding Limited Price and Consensus

Alibaba Group Holding Limited Price and Consensus | Alibaba Group Holding Limited Quote

Alibaba Eyes Opportunity in Southeast Asia

The digital economy in Southeast Asia has hit $72 billion target in 2018 so far, with the target expected to reach $240 billion by 2025, per e-Conomy Southeast Asia 2018 report from Temasek.

This significant growth in Southeast Asia bodes well for e-commerce, online media and online travel companies. Notably, e-commerce accounted for $23 billion by the end of 2018, which is twice that of 2017.

Alibaba has relied heavily on mergers and acquisition to rule in the fast-growing Southeast Asian markets. Apart from acquiring Lazada, Alibaba expanded in the perishable goods sector in Singapore by acquiring e-grocery company, Redmart.

Alibaba's Lazada also partnered with Uber and Netflix NFLX . Following these partneships, consumers paid S$28 ($20) a year and enjoyed offers like six months of Netflix streaming, discounts on Uber rides and free delivery on Taobao or Lazada purchases. Moreover, to build the world's first ever Digital Free-Trade Zone, the company made big investments in logistics and warehousing in Malaysia.

However, the company faces intensifying competition from the likes of Amazon AMZN and Tencent TCEHY in Southeast Asia, which is regarded as the next high-growth arena for online retailers.

Per Fortune , Alibaba and Tencent rely only on a small fraction of revenues from outside China. Moreover, these two companies have been significantly boosting their investments in Southeast Asia to grab equity stakes in major tech giants in this region. While Alibaba has invested in Lazada, Tencent has invested in SEA and Go-Jek, which are gaming and transportation companies, respectively.

Amazon too expanded its presence in the region with the launch of its Prime Now service in July. In a bid to directly compete with Amazon, Alibaba is planning to develop non-seller stores, which are a combination of physical and online stores in Southeast Asia.

Currently, Alibaba carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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