Singapore-based e-commerce firm Lazada is Alibaba’s most high-profile investment outside of its home market.
Photo: darren whiteside/ReutersSINGAPORE— Alibaba Group Holding Ltd. replaced the chief executive of its Southeast Asia e-commerce unit for the third time in just over two years, as the Chinese technology giant continues to struggle to get its international business on track.
Alibaba said it has tapped Chun Li, the head of Lazada’s Indonesia operations, Southeast Asia’s biggest market, to take on the CEO post as well. The move puts a tech expert and veteran of one of Alibaba’s domestic online markets atop Lazada. He succeeds Pierre Poignant.
Singapore-based Lazada operates in six markets in Southeast Asia, a region that has more than 640 million consumers.
Alibaba has for years been trying to replicate its huge success at home in markets outside of China. The Hangzhou-based company, which owns China’s two largest e-commerce platforms, has sought to expand its operations overseas as growth in its domestic market begins to slow.
Lazada is Alibaba’s most high-profile and costliest investment outside of its home market. It was the biggest e-commerce company in Southeast Asia—a region where demand for such services is expected to explode—when Alibaba bought a controlling stake in 2016. The Chinese company has poured in at least $4 billion in investments, revamped Lazada’s technology and sent a host of Alibaba executives to help lead the unit.
Yet Lazada’s revenue growth rate overseas has lagged behind Alibaba’s growth in Chinese retail markets, and it has fallen behind local and regional rivals in important markets—most notably Shopee, the e-commerce unit of Singapore-based Sea Ltd., which counts another Chinese tech giant, Tencent Holdings Ltd., as a backer.
During the past year, Lazada fell behind Shopee in the fast-growing markets of Vietnam and Malaysia in terms of the average number of people who use the app every month, according to rankings from data tracker App Annie. Lazada continues to lag behind in Indonesia, although it has recently shown faster growth there, analysts and market watchers said.
“The political, economic and cultural differences of the various Southeast Asian markets makes it difficult for a one-size-fits-all strategy, as Alibaba has been accustomed to in China,” said Tan Yinglan, a managing partner at Insignia Venture Partners.
Part of Alibaba’s challenge has been culture clashes and a failure at times to understand local markets, people familiar with the operations said.
The appointment of Mr. Li is an attempt to bridge those cultural gaps, since he has spent time both in Alibaba’s Hangzhou headquarters, as well as in the region with Lazada, Mr. Tan said.
Mr. Li had made “high impact contributions” to Lazada since joining in 2017, said Lucy Peng, the company’s chairman in a letter to its staff. A former chief technology officer in Alibaba’s enterprise e-commerce unit, Mr. Li had overseen a major technology upgrade at Lazada and had held the fort for the company in a tough and competitive market such as Indonesia, Ms. Peng said.
Lazada’s new CEO faces both rising competition and opportunity in the Southeast Asian market, said Florian Hoppe, a partner at Bain & Co. in Singapore. The coronavirus pandemic has led to a huge wave of new users entering the Southeast Asia e-commerce market, providing tremendous opportunities for all the players in the market.
Still, the company continues to face a fierce fight with Shopee and local operators within individual Southeast Asia for market share, and the new CEO will need to help Lazada retain the new users it has attracted recently, Mr. Hoppe said.
Write to Liza Lin at Liza.Lin@wsj.com and Phred Dvorak at phred.dvorak@wsj.com
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