On Wednesday, Singapore-based e-commerce company Lazada announced that it will acquire Redmart, an online grocery retailer.
Singapore startup Lazada, whose platforms sell goods from smartphones to baby products throughout the region of 600 million people, said in a statement it would buy Redmart to benefit from its operational and technological capabilities. It did not reveal financial details involved in the deal.
Lazada said it expects the transaction to be completed in the fourth quarter of this year, adding that RedMart will be led by its current management and will “continue to operate independently” after the transaction. RedMart now operates in Singapore but it has long harbored expansion ambitions.
Lazada Group CEO Maximilian Bittner said that RedMart’s strong management team and relentless focus on putting the customer first has resulted in customers loving them in Singapore. The capital flexibility provided through this deal will go towards innovating to delight our customers.
The acquisition come months after Japanese e-commerce operator, Rakuten, shuttered its online stores in Singapore, Indonesia, and Malaysia.
Amazon has plans to expand to South-east Asia, and there are signs the online retail giant is entering the region through Singapore, Techcrunch reported on Wednesday (Nov 2).
More specifically, China, which can leverage its manufacturing hub and market size. The company said that this alignment will help it expand into new product categories faster.
Amazon has also been preparing for the local launch by quietly acquiring new assets such as refrigerated trucks, and hiring new staff.
According to reports, Amazon plans to roll-out selected services in Singapore within the first quarter of 2017. Chinese e-commerce leader Alibaba bought a controlling stake in Lazada in April this year in a US$1 billion deal.
However, the research firm noted that while the region presented significant growth opportunities, market players would be challenged by low credit card ownership, which now stood at lower than 7 percent in all Southeast Asian markets except Singapore and Malaysia.