Tech

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

When Alibaba Group Holding Ltd. bought a controlling stake in Lazada Group SA eight months ago, it was yet another sign that Jack Ma wants to pursue foreign expansion.

In shelling out $1 billion for most of the Southeast Asian e-commerce company, the Alibaba chairman and his team were buying their way into a market they'd pretty much ignored. But their old nemesis, Amazon.com Inc., isn't likely to be far behind, Bloomberg News's Yoolim Lee reports.

Lazada is expanding its delivery network, looking for investments to bolster its supply chain and planning to start online grocery sales in more cities in anticipation of Amazon's arrival next year.

"It's a jungle out there," Lazada chief Maximilian Bittner told Lee, in what may have been an accidental pun.

A jungle is exactly what Alibaba, and its shareholders, need to test Ma's ability to survive in the world outside those cozy Chinese walls.

New Markets
Asean's more than 620 million potential customers are on the radar of foreign e-commerce leaders
Source: Asean
Note: Data for 2015

I've thrown plenty of shade at the notion that Ma's empire will one day meet its stated target of getting half of sales from overseas. Sure, Alibaba and Alipay have made a play for the India market through investments in Snapdeal and Paytm, but they're minority stakes and don't at all amount to putting a ring on it.

Spending Power
Asean's wealth distribution is uneven, creating a diverse set of challenges for Alibaba and Amazon
Source: Asean
Note: Shows GDP/Capita purchasing power parity based on IMF April 2016 estimates

Southeast Asia, through Lazada, might be different. Alibaba's getting in relatively early, and has already said "I do" with that billion-karat bling. 

But with Amazon breathing down its neck, Ma's resolve needs to be tested. Asean offers Alibaba a fresh market, a level playing field and 620 million potential customers to do just that. What it doesn't offer is any room for excuses. Alibaba has moved first, bought early and staked its claim well before any signs of Amazon's interest in the region.

Alibaba made it big because it was protected on its home turf. Now, with Asean, we'll learn whether the great wall of China served merely to keep foreign marauders out, or also trapped locals in.

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

To contact the author of this story:
Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story:
Matthew Brooker at mbrooker1@bloomberg.net