Alibaba Leads $400 Million Investment In Masan Group’s The CrownX

Chinese e-commerce Alibaba led a consortium that invested $400 million in the retail unit of Vietnamese conglomerate Masan, as announced on Tuesday.

Alibaba and Baring Private Equity Asia (BPEA) signed for a 5.5% stake in The CrownX, Masan’s retail arm. The deal implies a pre-money valuation of $6.9 billion for CrownX, equivalent to $93.50 a share, a statement from Masan said. The company will retain 80.2% stake of the retail unit.

"The CrownX will work closely with Lazada to accelerate our digital transformation into an 'all-in-one' platform to serve consumers' both offline and online purchases," Masan said in the statement.

The deal is set to expand Alibaba’s presence in Southeast Asia, where Lazada is the leading e-commerce platform. With the new agreement, VinCommerce will be the grocery retailer of choice in Lazada Vietnam.

"The transaction marks a shared vision across the company’s shareholders that The CrownX has the potential to establish Vietnam’s first tech-enabled consumer ecosystem and expand its reach to serve consumers nationwide," Masan said in a statement.

The establishment of The CrownX last year brought together two industry leaders to form a consumer and retail powerhouse. And this new strategic partnership with the world’s biggest online commerce company will accelerate Masan Group’s ability to transform The CrownX into a one-stop shop to serve consumers’ everyday needs, whether offline or online.

“Our immediate priority is to modernize Vietnam’s grocery market and develop an unparalleled consumer proposition from assortment to shopping experience,” said Danny Le, CEO of Masan Group.

“I strongly believe that this partnership will reduce our learning curve and enable us to reach our endgame more efficiently and effectively.”

The parties will share know-how, co-develop analytics to develop grocery as a key online category, transform VinCommerce’s offline stores into pick-up points for online orders, and explore synergies between the respective parties’ logistics platforms for service and cost optimization for consumers.

Grocery accounts for 50% of Vietnam’s retail market and 25% of consumer wallet share. However, online penetration in this sector has just begun.

Masan targets The CrownX’s online gross merchandise accounting for at least 5% of its total sales in the coming years.

BPEA, for their part, said that partnering with Masan and Alibaba is a strategic investment considering the potential to “supercharge The CrownX’s growth in a nascent retail market and create the largest consumer ecosystem in Vietnam”.

“As a long-term investor in the country, we think Việt Nam has a long runway for growth supported by strong macroeconomic tailwinds and attractive demographics,” said Janice Leow, Managing Director at BPEA.

Masan is also in advanced talks with other investors for an additional investment of at least $300 million in The CrownX. The deals are expected to be completed this year.