Here’s how Alibaba is reaping the benefits of overseas infrastructure investment as the domestic crackdown continues to tighten

Alibaba Group Holding Limited BABAthrough its Pakistani e-commerce subsidiary Daraz, has expanded its reach to Bangladesh, Sri Lanka, Nepal and Myanmar, becoming the largest e-commerce company in South Asia outside of India , reports the Financial Times.

Daraz has proven to be a promising avenue in a tricky region for Alibaba after it was barred from India due to geopolitical tensions. The growth of e-commerce and technology in Pakistan and Bangladesh has lagged behind other markets, including India and Southeast Asia. Smartphone adoption in Pakistan and Bangladesh is expected to overtake other major Asian markets like India or Indonesia.

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Daraz is one of the most visible examples of Chinese technology investment in a region where Beijing has invested heavily in infrastructure projects.

Interestingly, Daraz, with 40 million users, has expanded to lending and even streams cricket matches.

While Daraz uses Alibaba’s infrastructure such as Alipay for payments or Cainiao for logistics, he has also benefited from a more passive approach.

Alibaba’s international businesses, including Daraz, Lazada in Southeast Asia, Trendyol in Turkey and AliExpress, have shown promise amid China’s domestic tech crackdown, economic downturn and brewing competition.

Chairman Jack Ma planned to make Alibaba “a platform for global small businesses”, acquiring Lazada, Trendyol and Daraz, and expanding local cross-border platform AliExpress before pulling out in 2019.

Alibaba CEO Daniel Zhang and Toby Xu see huge potential for overseas expansion. However, Daraz’s markets have been affected by macroeconomic uncertainties, including a spike in fuel and other commodity prices, clouding its near-term outlook.

Sales at Alibaba’s international division also reflected a slowdown after the pandemic-fueled boom.

Price action: Shares of BABA traded down 0.08% at $106.30 when last checked on Wednesday.

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