Successful cross-border investments often require comprehensive research, strategic planning, risk management, and careful execution. In this article, we present two case studies illustrating successful cross-border investment strategies and how they were implemented.
Case Study 1: Alibaba’s Investment in Lazada
In 2016, Chinese e-commerce giant Alibaba invested $1 billion in Lazada, Southeast Asia’s leading online shopping platform. The investment marked Alibaba’s first significant foray into Southeast Asia.
Alibaba’s strategy was driven by an understanding of the burgeoning e-commerce market in Southeast Asia, a region characterized by a rapidly growing middle class and increasing internet penetration. Alibaba anticipated the potential growth in this market and aimed to leverage Lazada’s established infrastructure and consumer base to expand its footprint.
The deal was structured to give Alibaba a controlling stake in Lazada, allowing Alibaba to guide the company’s strategy and operations to align with its own. Since the investment, Lazada has grown exponentially, and the value of Alibaba’s investment has multiplied, proving the effectiveness of their cross-border strategy.
Case Study 2: SoftBank’s Investment in Uber
Japanese multinational conglomerate SoftBank has been recognized for its aggressive and successful cross-border investment strategy, especially in the technology sector. A notable example is SoftBank’s investment in Uber in 2018.
SoftBank’s $7.7 billion investment in Uber gave it a significant stake in the ride-hailing company. This was part of SoftBank’s broader strategy to invest in promising technology companies worldwide, leveraging its substantial financial resources and global reach.
Through the deal, SoftBank was able to diversify its portfolio and gain exposure to the rapidly growing ride-hailing market. SoftBank’s stake in Uber provided it with a strategic position in a global industry leader, thereby aligning with its broader vision of investing in technology companies that are shaping the future.
These case studies highlight the potential of well-planned and executed cross-border investment strategies. Both Alibaba and SoftBank understood the markets they were entering, identified promising companies that aligned with their own goals, and structured their investments to provide control or significant influence. By conducting thorough due diligence, understanding the market, and aligning investments with broader strategic goals, investors can increase the likelihood of successful cross-border investments.