Alibaba extends e-commerce reach, acquires Daraz - 'the Flipkart of Pakistan'

Alibaba is expanding its reach in the subcontinent. After pumping in billions of dollars in India, Jack Ma-led Chinese group has made an entry across the border.

The Chinese Internet conglomerate today announced the acquisition of Daraz Group, a Pakistan-based Rocket Internet-backed e-commerce platform. This is the first ever investment by Alibaba in Pakistan.

With the acquisition, the Chinese group has also expanded in four other South Asian markets -- Bangladesh, Myanmar, Sri Lanka and Nepal -- serving a combined population of over 460 million, 60 per cent of which are under the age of 35.

The acquisition will lead Daraz to leverage Alibaba’s leadership and experience in technology, online commerce, mobile payment and logistics which will expedite the growth process. The platform will continue to operate under the same brand.

"We have still only scratched the surface of the potential and there is still a long way to go on the e-commerce journey," said Bjarke Mikkelsen and Jonathan Doerr, Co-CEOs at Daraz.

Founded in Pakistan in 2012, Daraz offers e-commerce services in other markets such as Bangladesh, Myanmar, Sri Lanka and Nepal. It raised US$55 million in series A funding in September 2015 from Rocket Internet. 

In June 2016, the German startup juggernaut announced the merger of its e-commerce marketplaces Daraz and Kaymu under a new entity Daraz Group. Kaymu was a Pakistan-based Rocket Internet-backed open marketplace on the lines of ebay.

Alibaba Group believes that a technology-enabled commerce ecosystem will play a critical role in driving the long-term economic development in South Asia.

The Chinese Internet conglomerate has been for some time trying to enter the Pakistani market and had been in talks with Daraz since earlier this year.

This will be the first investment of Alibaba across the border. However, it is known as one of the most active investors in this region.

The Jack Ma-led Chinese group is gearing up to deploy about $8 billion over the next four years in India. It plans to invest in areas including, payment, enterprise, and entertainment (OTT) among others.

Meanwhile, its rival Tencent has so far pumped in over $1.5 billion in Indian Internet firms including Ola, Practo, Flipkart, and Hike.

The development was first reported by Dawn.