Online marketplace, including mobile, Alibaba invested heavily in its expansion into Southeast Asian countries recently by investing $1 billion into Lazada, the foremost ecommerce platform for the Southeast Asian markets.

Lazada serves a largely untapped market, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. These six countries combined create a populous consumer base of approximately 560 million with estimated Internet users hovering around 200 million. This market comprises the world’s third largest population, and while Internet connectivity is low albeit steadily increasing, the Southeast Asia marketplace is posed to offer tremendous growth potential.

Looking at data from 2013, with less than 1% of the total retail market currently happening online (except in Singapore), if it were to reach 5% of total retail, the Southeast Asian e-commerce market could be worth more than 20 Billion USD (according to analysis from The Wall Street Journal.

Alibaba is now the controlling shareholder of Lazada, having purchased majority stake from previous shareholders Rocker Internet, Tesco, and Kinnevik. With the financial backing of Alibaba, Lazada is in a much better position to counter rival marketplaces in the Southeast Asian market, like competitors Tokopedia and MatahariMall, as well as expand their reach to markets outside of Southeast Asia.