Brenda Goh, Fanny Potkin

SINGAPORE/SHANGHAI (Reuters) – Alibaba Two sources close to the situation told Reuters that the Group intends to increase its Southeast Asian division, Lazada to Europe. This is as the Chinese ecommerce company looks to further expand overseas amid slower domestic opportunities.

This move follows months of Cainiao’s logistic arm opening a central hub in Belgium for European sales.

Alibaba has a presence in Europe via AliExpress its international e-commerce platform. This platform mainly targets European consumers who are looking for goods made by Chinese companies such as clothing and accessories for smartphones.

One source told Reuters that Lazada will target European suppliers, and AliExpress will focus mainly on China-bound cross-border sales. The initiative will be led by James Dong (Lazada Thailand CEO), that source said.

Jiang Fan from Alibaba was in Singapore to meet with the company’s international commerce director.

Reuters did not reach Lazada or Alibaba immediately for comment.

Lazada did not indicate which European countries it intended to expand. They said that the details are being worked out. The two men declined to reveal their identities as they were not authorized to address the media.

Alibaba in China has been faced with strong competition by such competitors as Pinduoduo (NASDAQ:) Inc, and ByteDance subsidiary Douyin. However, new regulations limit expansion opportunities. Lazada (NASDAQ.) was created in 2012 by Germany’s Rocket Internet tech incubator. It is Southeast Asia’s answer for Amazon.com Inc. Alibaba purchased a controlling interest in the company for approximately $1 billion in 2016, making it the largest overseas deal of its kind at that time.

Alibaba claimed in December it set targets of reaching $100 billion gross merchandise volume in Southeast Asia and 300,000,000 users.

Lazada had 159m users and generated $21 billion of gross merchandise volume for the year ending September 2021. This was in addition to its larger competitor Shopee which is owned by Sea Ltd.

Shopee’s global expansion has seen it enter markets such as France, Spain, Poland and France. It pulled out of France and India in March due to a poor growth outlook.