Chinese e-commerce behemoth Alibaba acquired a controlling stake in Lazada, one of the biggest e-commerce platforms in Southeast Asia for $1 billion earlier this year. Last week, rumors of Lazada taking over Singapore-based online grocery delivery service Redmart were doing rounds. The acquisition was priced between $30-40 million, according to a report by TechCrunch. Today the companies have confirmed the acquisition. The financial details have not been revealed but the transaction is scheduled to be complete by the end of this year.

The move comes on the heels of reports that Redmart – backed by Facebook billionaire co-founder Eduardo Saverin – is seeking a buyer as it faces intensifying market competition.

Lazada offers a variety of products ranging from electronics, home appliances, to fashion products, baby essentials and operates in six Southeast Asian countries. It said in a statement on Wednesday that “both parties will benefit from each other’s cutting-edge technological and operational infrastructure, as well as an extended customer network”. Maximilian Bittner, CEO of Lazada Group, commenting on the acquisition said,

As part of our growth strategy, we are always looking for ways to serve our customers better by adding new product categories and improving our service offering. RedMart’s strong management team and their relentless focus on putting the customer first has resulted in customers loving them in Singapore.

Alibaba has maintained a track record of promoting autonomy amongst its portfolio companies, be it Paytm, Ant Financial, Cainiao or Lazada. So, RedMart’s statement that it will continue to be run independently of Lazada even after the transaction, is not surprising. Roger Egan, co-founder and CEO of RedMart, said,

Through this partnership, we can further scale our logistics and tech platform to extend our product assortment and to offer an even more convenient service for our customers in Singapore. The capital flexibility provided through this deal will go towards innovating to delight our customers.

Launched five years ago, Redmart has raised over $55 million in capital from investors including Facebook co-founder Eduardo Saverin, and games giant Garena. Redmart was the first to spearhead the e-grocery model in Southeast Asia. According to a report by Bloomberg, it had been in touch with banks to find a prospective buyer since as it has been facing financial issues for quite a while.

About a month ago, President Jack Ma of Alibaba stated that it would invest more in Southeast Asia to gain a prominent foothold in the region. With the deal, the e-commerce giant is clearly pushing itself to be “go-to brand” for all kind of products consumers demand. With Amazon planning to launch in Southeast Asia early next year, the competition is sure slated to intensify. Also, it is learned that Amazon was a Redmart suitor earlier this year but had bid less than $30 million so the deal didn’t materialize.

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