Lazada, the Southeast Asian arm of Chinese e-commerce giant Alibaba Group, plans to expand to Europe, Reuters reported, quoting two sources familiar with the matter.

Lazada plans to target local European vendors, while AliExpress will continue to focus mainly on cross-border sales from China, one of the sources told Reuters. Lazada Thailand CEO James Dong will help spearhead the initiative, that person was quoted as saying.

Alibaba overseas commerce head Jiang Fan visited Singapore in April to discuss the expansion, the source reportedly said.

The move to expand in Europe comes months after Alibaba’s logistics arm, Cainiao, opened a central hub for European sales in Belgium. The move also comes as Alibaba seeks overseas growth amid slowing opportunities in its home market.

Alibaba already has a presence in Europe through its global e-commerce platform, AliExpress, mainly targeting consumers looking for goods from Chinese manufacturers such as smartphone accessories and clothing.

Lazada and Alibaba did not immediately respond to TechNode Global‘s requests for comment.

The details were being finalized and the sources did not specify which European countries Lazada intended to expand to, according to the report.

In China, Alibaba increasingly faces stronger competition from rivals as ByteDance subsidiary Douyin and Pinduoduo Inc. Tighter regulations towards tech companies have also limited opportunities for expansion.

Alibaba acquired a controlling stake in Lazada for about $1 billion in 2016. Lazada was founded in 2012. In Southeast Asia, it competes with Sea Ltd’s Shopee. Shopee has expanded globally, entering markets such as Poland, Spain and France last year. The e-commerce firm, however, exited India and France in March.

Alibaba reportedly said in December it had set targets for the Southeast Asian marketplace of $100 billion in gross merchandise volume (GMV) and 300 million users.

Lazada generated $21 billion in GMV in the year to end-September 2021 and had 159 million users.

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