HANOI, May 18 (Reuters) - Alibaba Group Holding Ltd
is leading a $400 million funding in the retail unit
of Vietnamese conglomerate Masan Group Corp, marking
its first investment in one of Asia's fastest-growing economies.
A consortium comprising Alibaba and Baring Private Equity
Asia, is acquiring a 5.5% stake in The CrownX, in a deal that
will also strengthen Lazada, Alibaba's Southeast Asian
e-commerce platform, Masan said in a statement on Tuesday.
The CrownX, Vietnam's biggest retail company, was formed
through a merger of Vingroup's retail units and
high-tech farms with Masan's food and beverage unit in 2019.
It had a pre-investment valuation of $6.9 billion or $93.50
a share, according to the statement.
Parent company Masan will hold 80.2% of the retail unit.
"The combination of Alibaba's online retail expertise,
Lazada's e-commerce platform in Vietnam, and Masan's leading
offline network will be a strong catalyst to modernise Vietnam's
retail landscape," said Kenny Ho, head of investment for
Southeast Asia at Alibaba Group.
As part of the transaction, VinCommerce, with its more than
130 supermarkets and 2,900 mini-marts, will be the preferred
grocery retailer on Lazada's platform in Vietnam and its
physical stores will become pick-up points for online orders.
Grocery accounts for 50% of Vietnam's retail market and 25%
of consumer spending but online penetration is still small,
Lazada competes with Singapore-based Internet platform Sea's
Shopee, which is gaining ground across Southeast Asia.
Alibaba's investment is its largest in the region since its
$1.1 billion funding in Indonesian e-commerce leader Tokopedia
in December 2019, according to Refinitiv data.
Sources familiar with the matter said Alibaba is providing
the majority of the funding in the latest deal that kicked off
in early 2020.
Chinese web retailer JD.Com and financial sponsors also
showed interest to invest in The CrownX, the sources said.
Masan also said on Tuesday that it was in advanced talks
with other investors for an additional investment of between
$300 million to $400 million in The CrownX and expects this to
close later this year.
The sources said regional retail players and financial
investors are likely to emerge as potential buyers in the next
Credit Suisse advised Masan on the deal and Deutsche Bank
advised Baring Private Equity Asia.
(Reporting by Phuong Nguyen in Hanoi, Anshuman Daga in
Singapore and Kane Wu in Hong Kong; Editing by Christopher
Cushing, Ed Davies, Martin Petty)