Alibaba’s e-commerce platform in Southeast Asia, Lazada, undertakes a substantial leap into generative AI to allure a diverse user base amidst escalating rivalry in Southeast Asia. Over the past two years, Alibaba has funneled approximately $2 billion into Lazada.
The infusion arrives as Lazada grapples with upholding its market share in Southeast Asia, where Shopee commands a commanding 45% share. Moreover, TikTok Shop has rapidly seized 20% of the market. Notably, while Lazada captures the admiration of older consumers, platforms like Shopee and TikTok Shop have garnered favor among the youth and tech-savvy demographic.
To combat these obstacles, Lazada is deploying AI-driven enhancements to amplify its user base and streamline operations for vendors and customers. The platform will harness AI to furnish tailored recommendations to users, smoothen after-sales services via AI agents, empower sellers to craft niche content for diverse markets, accurately forecast demand, and enhance logistical efficiency.
Alibaba Seeks Expansion Beyond China
Alibaba’s investments in Southeast Asia mirror its overarching agenda to propel growth through territorial expansion. With China’s economy confronting regulatory hurdles and geopolitical strains with the U.S., Alibaba is leveraging its AI and technological prowess to secure a competitive foothold in the Southeast Asian arena.
Is Alibaba a Sound Investment Now?
Glancing at Wall Street sentiments, Alibaba holds a Strong Buy consensus rating backed by 16 Buy recommendations and three Holds issued in the recent quarter. Priced at $123.74 per share, the average Alibaba price target indicates a promising upside potential of 23.65%. Year-to-date, the company’s shares have surged by approximately 32%.
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