INSUBCONTINENT EXCLUSIVE:
Alibaba Lazada is introducing new credit options for SMEs as it aims to boost the number of retailers in Southeast Asia, the region with 650
million consumers.
The firm announced a partnership with Finaxar that will see the fintech offers its services to Lazada sellers in
There are plans to expand the arrangement to cover other parts of Southeast Asia in the future.
Two-year-oldFinaxar offers a range of
financial products in Southeast Asia but now it has teamed up with the e-commerce company to provide a credit line option for Lazada
sellers, as opposed to more structured financing such as loans
The credit line can last for up to six months, with up to SG$5,000-SG$1 million ($3,650-$730,000) on offer, the companies said.
The service
is priced at0.7-1.5 percent every 30 days and at a rate that is pro-rated
Finaxar said all fees are shown transparently in the service to avoid the unwanted surprise ofhidden add-ons.
Finaxar foundersVihang Patel
andSian Tan told TechCrunch that a credit line gives companies the flexibility to dip into additional cash when needed, for example during
peak season to buy more product, and also pay parts back when significant payment volumes come in, without the commitment of more formalized
lending.
The financial assessment, they explained, comes via a one-click integration with Lazada seller dashboard
When clicked, thatsends the merchant to theFinaxar where they are asked to provide information; a credit assessment is delivered in under
five minutes.
Patel saidFinaxaris currently assessing expansion to two undisclosed markets, which he said would include launches in
collaboration with Lazada and potentially as soon as before the end of this year
That pretty crucial for the partnership to make an impact for Lazada, since most of its 300,000 retailers are located outside of
Singapore.
Alibaba has pumped billions into Lazada since it took a majority investment in 2016
Most recently it injected$2 billion in Marchin a move which also saw Alibaba install Lucy Peng, one of its original 12 founders and the
former Chairwoman of Lazada and ex-executive chairman of Ant Financial, as Lazada CEO.
Lazada is in a dogfight with Shopee, the e-commerce
firm of United States -listed Sea, to become the dominant e-commerce platform in Southeast Asia
Sea recently pumped $500 million of newly-raised capital into Shopee, while this week its latest earnings revealed that the service
quarterly revenue has grown to $58.8 million
Alibaba doesn''t reveal comparable figures for Lazada.
Lazada collaboration withFinaxarcomes after Aspire Capital, an SME financing startup
founded by an ex-Lazada executive, announced it had raised $9 million.
