Alibaba is no way limited to just China
Alibaba is no way limited to just China
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Alibaba is more than just China

Most readers will know that Alibaba operates the largest e-commerce platform in China, with its Taoabao and Tmall marketplaces. But did you know that Alibaba also operates Southeast Asia’s largest online retail marketplace?

-Chris Demasi

 

Most readers will know that Alibaba operates the largest e-commerce platform in China, with its Taoabao and Tmall marketplaces. Some will know that Alibaba also operates China’s largest cloud computing platform, Alicloud. But did you know that Alibaba also operates Southeast Asia’s largest online retail marketplace?

Lazada is Alibaba’s e-commerce platform across Indonesia, Singapore, Thailand, Malaysia, Vietnam, and the Philippines. The Southeast Asian region is home to over 650 million people, but the digital economy is still just 5% of total economic activity. That represents a tremendous opportunity for Lazada in a massive market, with the value of e-commerce transactions expected to quadruple in the next five years.

Lazada has the right to win in this market. Already 100 million users visit Lazada’s site each month and 80 million of those are transacting customers – almost four times the entire population. And they are spending more, as the Southeast Asian middleclass expands on its way to doubling by 2030, and already Lazada’s order volume is doubling year to year.

Lazada’s users, customers, and orders

What is most exciting for Alibaba investors, like clients of our Montaka funds, is that Lazada’s success comes for free. In our view Alibaba’s share price today does not reflect the value of owning the leading e-commerce platform in one of the fastest-growing markets in the world. It’s what we call a “real option”, that costs the Alibaba shareholder nothing, but could be worth many billions of dollars in the future.

 

Montaka owns shares in Alibaba.

Chris Demasi is a Portfolio Manager with Montaka Global Investments. To learn more about Montaka, please call +612 7202 0100.

Our Montaka Global Long Only strategy strives to act as a core, high conviction, global portfolio holding. Consistent with the long portfolios in our Montaka strategies, this offering is focused on owning the world’s high quality, undervalued businesses – and cash when appropriate – to outperform its benchmark.

Our Montaka Active Extension strategy strives for maximised return over the long-term. Owning the Montaka long portfolio typically scaled up to approximately 130 percent - and the Montaka short portfolio typically scaled down to approximately 30 percent – this strategy results in a net market exposure of approximately 100 percent most of the time.

Our Montaka variable net strategy strives for significant downside protection – but with minimal upside reduction. Focused on owning the world’s great and growing businesses when they are undervalued, while managing a portfolio of short positions in businesses that are deteriorating, misperceived, and overvalued, this strategy is our flagship long-short

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Strategies

Our Strategies

Our Montaka Global Long Only strategy strives to act as a core, high conviction, global portfolio holding. Consistent with the long portfolios in our Montaka strategies, this offering is focused on owning the world’s high quality, undervalued businesses – and cash when appropriate – to outperform its benchmark.

Our Montaka Active Extension strategy strives for maximised return over the long-term. Owning the Montaka long portfolio typically scaled up to approximately 130 percent - and the Montaka short portfolio typically scaled down to approximately 30 percent – this strategy results in a net market exposure of approximately 100 percent most of the time.

Our Montaka variable net strategy strives for significant downside protection – but with minimal upside reduction. Focused on owning the world’s great and growing businesses when they are undervalued, while managing a portfolio of short positions in businesses that are deteriorating, misperceived, and overvalued, this strategy is our flagship long-short