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China's biggest e-commerce company, Alibaba Group, broke into the Pakistani market on Tuesday by fully acquiring the Daraz Group.
"With the acquisition, Daraz will be able to leverage Alibaba’s leadership and experience in technology, online commerce, mobile payment and logistics to drive further growth in the five South Asian markets that have a combined population of over 460 million, 60% of which are under the age of 35," said a press release issued by Daraz.
Founded in Pakistan in 2012, Daraz has since expanded in Bangladesh, Myanmar, Sri Lanka and Nepal. It will continue to operate under the same brand, said the press release.
Hailing the move, Daraz Co-CEOs Bjarke Mikkelsen and Jonathan Doerr said that there is still a long way to go on the e-commerce journey. "We have still only scratched the surface of the potential," they said.
Daniel Zhang, CEO of Alibaba Group, said: "Together with Daraz, we can now empower entrepreneurs to better serve consumers in the region through our technology and expertise. In Daraz, we found a great team that espouses our values and believes that a technology-enabled commerce ecosystem will play a critical role in driving the long term economic development in South Asia."
The Alibaba group has been for some time trying to enter the Pakistani market. Last year, it signed a memorandum of understanding (MoU) with the Ministry of Commerce and had been in talks with Daraz since at least earlier this year.
Comments (50) Closed
Alibaba is good and Daraz is equally bad.. lets see the outcome.
Good news , Pakistani will experience more innovation in e-market.
good
My country is getting sold off to China. I love you China but don't buy all of my Pakistan :( We sold our 50% of stock market to you isn't that enough. Though I must say I much rather be an autonomous region of China rather than being under people like Ishaq Dar and Nawaz glad both are gone now.
SinoPak Iron Brothers 4 Life!
Great, good and big FDI flowing in.
Will the consumer also benefit from the "much extensive" catalog of Alibaba? If not, I doubt we Pakistanis will see benefit or loss from this merger.
Though looking at prices, Alibaba will still be more expensive than someone asking a relative to bring something from overseas.
Hope you get succeed.
The consumer confidence in online POS has attracted giants like Alibaba to venture into Pakistani online market, otherwise government economic policies has been devastating for businesses! (A general opinion).
bye bye to local traders!
That's great news. In the absence of Amazon and ebay in Pakistan, there was no major online shopping option to access global products. Now we can enjoy the wide range of product offerings by Alibaba group, just like the rest of the world.
This will bring in a lot of opportunities and threats combined.
Very good for the growth of overall IT industry in Pakistan.
A win-win for both.
@Zak ...and how would the FDI flow in? It’s unfortunate that we are selling each and everything to China - without entering into a partnership for mutual interest. Chinese are not just limited to ports and shipping, they now have license to catch all our fish as well. They will grab electricity control along with all major economic/industrial facilities and Pakistanis will be working under them on payroll.
I have lived in China for about 4 years and there’s nothing you can’t buy online and it can’t reach your door step without moving an inch. Another great opportunity will be the jobs created in postal services for dispatching millions of packages. It’s indeed a news I have been waiting for years to why Pakistan didn’t take advantage of the ‘friendship’ for elevating living standards and creating thousands of jobs.
Sold for how much?
Another nail in Pakistan’s coffin
Alibaba is not an 'Tech' company, but rather an E-commerce company selling goods and services online. It has not created too many technologies of its own like Amazon or Google to be called a 'Tech' Company.
China is proving to be the East India company of 21 century, it will slowly take over all sectors, while some people will advocate for innovation and choice, the reality is the ownership of businesses is going to China which is very worrying.
This Daraz is bunch of thieves. They deliver things which were even not ordered instead they delivered things of poor quality and costly than the market price. People please beware ....
Not good for the local Pakistani Market, the Chinese are slowly taking over everything in Pakistan, things should be planned very carefully when dealing with China.
Daraz should enter the Asia-Pacific market after this acquisition.
@Imtiaz Ali Khan how does acquiring equity in a private company equate to compromising autonomy? By this logic Tata shouldn`t have acquired Jaguar
@Imtiaz Ali Khan when the situation is that no other country is willing to invest in your country because of political uncertainty, law and order and worst economic condition. China is the only country is investing despite knowing all the facts only way to revive our stagnant economy.
Come on in. We are ready to share success with you.
From now on all profits will go out of Pakistan. How is this good?
The PML-N government failed to tap the enormous budding talent in country with sensible reforms / policy for the IT industry. China to the rescue, Chinese tech giant Alibaba entering Pakistani market is great news, bringing great leadership and experience. This will help put Pakistan on the world tech map and bring enormous benefit for the country.
Dont worry people Daraz is not a Pakistani company it could be acquired by anyone, anytime.
Good news. Let the expansion begin.
Daraz was formed on the model of Amazon USA and was a sucessful E. Retailer. It had great potential for Pakistani communities in foreign countries and at home. Daraz was reluctsnt to sell and the negotiations dragged on since 2012. Alibaba China drove a hard bargain. Alibaba must have given an offer which Daraz could not refuse.
Pakistan need high end tech institution .
Major implication of this tie,
Alibaba! welcome to Pakistan.
@karman Its acquisition ! You should clear your concept of difference between investment and acquisition.
Not a bad thing. Good to get newer thing. Apply taxes as per rules and no free lunch.
great work and i hope best consequence
i hope will have good result appear in futree
@Pro Pakistani I think it is the other way around. It is to sell cheap Chinese goods to Pakistanis.
now China started acquiring Pakistani companies and it will end up acquiring whole of Pakistani business houses.
@Viking Star good analysis.
What about the local innovation companies - aren't we creating competition for them in our own country... can we open any business in China ??
@The UK Alibaba will sell Chinese products and not local Pakistani manufactured. Spread of Alibaba is sure death to our manufacturing. Then what is left..
A monopoly in the making?
Extremely good news... we are creating profitable companies and attracting foreign bidders. This is excellent as we are getting FDI and moving forward. China-Pakistan friendship for ever!
@Farhan - This is not true friend. Just check other countries where Alibaba is operational with local market kings and see which stuff they used to sell most. Local or Chinese. You come to know the reality.
Bad day for new indegeneous player, good for consumer. Today here Walmart bought share of Bangalore based Flipkart worth 16 billion dollar at 20 billion dollar. FDI is good but still one's own is always great.
Welcome to the "green-shirts" club. Keep it up and hang on tough.
Don't worry, Alibaba invested heavily in India's payTM (Paytm is valued at $10 billion) also. That did not change much. As long as your government is careful there is nothing to worry.
Full acquisition is not good.It should be 50:50
@KingOfNorth - Alibaba does not have majority stake in paytm