Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

It's about time Jack Ma spent some more money overseas.

The chairman and founder of Alibaba, China's largest e-commerce site, said in November he aims to generate at least 50 percent of the group's revenue from outside the country. That's a tall order considering the contribution from offshore has been moving in the opposite direction. Alibaba got 13.5 percent of its revenue from outside of China in the December quarter, down from 17.4 percent the quarter prior and 20.3 percent in the three months ended March 31 last year.

Alibaba said today it will expand its footprint to Southeast Asia with a $1 billion deal for control of e-commerce group Lazada. It'll pay $500 million for new shares in the closely held company and also purchase stock from existing investors, according to a statement Tuesday. Lazada investors that will sell stakes include Germany's Rocket Internet, Tesco and Investment AB Kinnevik.

With one fat check, Alibaba gets access to Indonesia, Malaysia, Singapore, the Philippines, Thailand and Vietnam. That's a long and important list.

China Centric
Alibaba's overseas revenue contribution has been falling
Source: Bloomberg

Indonesia, Southeast Asia's largest economy, has about 256 million people, 25 percent of them under the age of 15. Online advertising revenues in Thailand are expected to go from $76.5 million in 2014 to $381.5 million next year, according to Bloomberg Intelligence forecasts.

Alibaba's overseas acquisitions to date have been muted. In February, it was part of a $793.5 million round of funding in virtual-reality startup  Magic Leap, along with Google and Qualcomm. It's also taken a minor stake in online deals website Groupon, and added to its funding of ride-sharing company Lyft, but both look more like portfolio investments than strategic moves. By contrast, Alibaba has spent multiples more on video site Youku Tudou and retailer Suning Commerce, both of which are very much Chinese entities with limited overseas exposure.

Ma's investment in Lazada isn't a moment too soon. Alibaba is over reliant on China at a time when growth in Asia's biggest economy is slowing and competition is rising. Although consumption accounted for about 66 percent of GDP expansion in 2015, up from 51 percent in 2014, President Xi Jinping still faces a tough battle weaning the nation off debt-fueled investment and smokestack industries.

Now that Ma's decided to bet $1 billion on economies in the nascent stages of e-commerce, perhaps investors can start to believe he's serious about boosting revenue from overseas.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. Magic Leap calls it mixed reality.

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Tim Culpan in Taipei at

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