Alibaba unveiled an ambitious plan this week to develop its Southeast Asian e-commerce company to $100 billion in transactional sales, as well as a goal to become carbon neutral by 2030.
In presentation slides posted to its site for its annual Investor Day, where it generally reveals sales numbers and future objectives of its business units with investors, China’s largest e-commerce company presented its vision for its Southeast Asian e-commerce arm Lazada on Friday. During a presentation on Friday, Alibaba’s chief executive Daniel Zhang also discussed the company’s carbon emission ambitions.
The goal to quintuple Lazada’s overall gross merchandise volume — defined as the entire amount of sales transacted on its platform — came as the Chinese business sought new development opportunities outside of its home market, where it faced greater competition and a weakening economy.
According to the presentation slides, Alibaba wants Lazada to serve 300 million customers in the future. In 2016, the Hangzhou-based company acquired a majority stake in Lazada, and in 2018 it invested an extra $2 billion to expand the business.
During a presentation on Friday, Alibaba’s incoming chief financial officer, Toby Xu, said the company’s China commerce business has encountered “near-term headwinds of a weakening macro-environment and a heightened level of competition.”
“As a result, GMV and revenue growth have slowed in the most recent quarter,” he explained. “However, we see chances to tap into new addressable markets and grow new consumers, which will help us position ourselves effectively in the long run.”
With 159 million monthly active users, Lazada’s gross merchandise volume for the last twelve months from September 2021 hit $21 billion. In a separate presentation on Friday, Alibaba CEO Daniel Zhang stated that the company saw “substantial potential in the overseas markets” in the future.
“E-commerce penetration in Southeast Asia is barely 11%, and Lazada’s annual consumers account for only 34% of regional Internet users,” Zhang said. “Both the total market size and our penetration have huge potential.”
Alibaba’s drive into Southeast Asia comes as it faces stiffer competition in its home market from rivals in short-video e-commerce, such as Kuaishou, and group-buying site Pinduoduo, which has spent extensively on sales and marketing to grow its user base.
Over the last year, the company has also been subjected to heightened regulatory scrutiny, as Chinese authorities enhanced regulatory monitoring in the technology industry in response to worries that some Big Tech companies were engaging in anti-competitive and monopolistic activities. Alibaba was fined a record $2.8 billion earlier this year after antitrust authorities determined it had broken the law.
Separately, Zhang stated on Friday that the company plans to achieve carbon neutrality in its own operations by 2030, as well as halve emissions across its supply chain and business environment.
Zhang also stated that the corporation intends to cut emissions by utilizing more renewable energy sources as well as “energy-saving and efficiency-improving technologies.”
Alibaba would also enlist the help of consumers, merchants, business partners, and service providers in their efforts to reduce carbon emissions. Examples given by Zhang include encouraging the use of green products, green transportation options, and the reuse and resale of used things.
Alibaba’s commitment to minimizing its carbon footprint aligns with China’s ambitious goal of becoming carbon-neutral by 2060. Currently, the country is the world’s largest carbon emitter, accounting for about a third of worldwide emissions.
Many of China’s state-owned enterprises have now been given energy targets, though most have struggled to wean themselves off coal usage, which is one of the country’s largest contributors to enormous carbon emissions.
