Here's How Alibaba Is Reaping Benefits Of Overseas Infra Investments As Domestic Crackdowns Continue To Pinch

Alibaba Group Holding Limited BABA, through its Pakistan e-commerce subsidiary Daraz, expanded its reach across Bangladesh, Sri Lanka, Nepal, and Myanmar, becoming South Asia's largest e-commerce company outside India, the Financial Times reports.

Daraz has proved a promising avenue into a tricky region for Alibaba after being shut out of India over geopolitical tensions. The growth of e-commerce and tech in Pakistan and Bangladesh has lagged behind other markets, including India and South-East Asia. The smartphone take-up in Pakistan and Bangladesh is said to overtake other large Asian markets like India or Indonesia.

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Daraz is one of the most visible examples of Chinese tech investment in a region where Beijing has heavily invested in infrastructure projects.

Interestingly, Daraz, with 40 million users, has expanded into lending and even streams cricket matches.

While Daraz utilizes Alibaba infrastructure such as Alipay for payments or Cainiao for logistics, it has also benefited from a more hands-off approach.

Alibaba's international business, including Daraz, south-east Asia's Lazada, Trendyol in Turkey, and AliExpress, proved promising amid China's domestic tech crackdown, economic slowdown, and brewing competition.

Chair Jack Ma conceived making Alibaba "a platform for global small business," acquiring Lazada, Trendyol, and Daraz, and expanding homegrown cross-border platform AliExpress before stepping down in 2019. 

Alibaba CEO Daniel Zhang and Toby Xu see massive potential in overseas expansion. However, Daraz's markets have been affected by macro uncertainties, including a surge in fuel and other commodity prices, clouding its short-term outlook.

Alibaba's international division sales also reflected a slowdown after the pandemic-fueled boom.

Price Action: BABA shares traded lower by 0.08% at $106.30 on the last check Wednesday.

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