A look at Alibaba's plans to expand into South Asia as its Chinese operations sputter, including through its Daraz unit in Pakistan, acquired for $194M in 2018
Financial Times : Tweets: @rencapman , @dreyerchina , and @b_parkyn Tweets: Charlie Robertson / @rencapman : South Asia smartphone penetration forecast to boom - Bangladesh from 41% to 62% 2020-25, Pakistan 51% to 74%, and India 69% to 85% .. according to GSMA chart in this. https://twitter.com/... Mark Dreyer / @dreyerchina : Not a whole lot of actually cricket🏏in this, but a very English title: “From nappies to cricket: China's Alibaba targets South Asia”! https://www.ft.com/... Benjamin Parkin / @b_parkyn : “Pakistan was being looked at as a very unstable market [but] this is the largest market that's left.” Our story on Daraz, the Pakistani ecommerce company helping Alibaba crack South Asia w/@rwmcmorrow https://www.ft.com/...
Context & Ripple Effects
Alibaba has spent nearly a decade trying to grow past China: since its 2014 IPO it has invested $5B+ in new markets yet international retail still contributed only ~5% of revenue in a recent fiscal year, and its India push produced misses like Paytm Mall that forced a retreat into smaller, vertical e-commerce bets. With Chinese operations now sputtering, the company's 2018 acquisition of Pakistan's Daraz for $194M becomes the main vehicle for a renewed South Asia push.
The timing is underpinned by the smartphone forecasts cited in the coverage: GSMA data shows penetration in Pakistan rising from 51% to 74% and Bangladesh from 41% to 62% between 2020 and 2025 — the same frontier-market logic that later shows up in Alibaba's broader playbook, from Sialkot's concentration of B2B sellers to the $7B subsidy program and Southeast Asian infrastructure buildout announced years later.
First-order effects
- Daraz shifts from a side acquisition to a strategic priority: Pakistan, once dismissed internally as unstable, is now framed as the largest market in Alibaba's South Asia expansion as domestic Chinese growth stalls.
- The smartphone-penetration forecasts give Alibaba a concrete growth runway in Pakistan and Bangladesh that its maturing home market no longer offers.
Second-order effects
- After the Paytm Mall failure and the India strategy review, Pakistan and Bangladesh — not India — absorb the South Asia bet, pushing Alibaba to build logistics and payments infrastructure in markets with thinner e-commerce rails.
- Sialkot's density of paid B2B sellers suggests the consumer push (Daraz) and the export corridor (Alibaba.com) can reinforce each other, tying South Asian merchants into Alibaba's China-centered supply chain.
Third-order effects
- If international revenue stays stuck near ~5% despite cumulative multi-billion-dollar investments, the pattern points to Chinese platforms treating frontier markets as long-duration option positions rather than near-term profit centers — with subsidy-heavy plays like the later $7B program as the template.
- Sustained underperformance abroad keeps pressure on Alibaba to defend its core Chinese business, where subsidy wars and infrastructure spending become the fallback growth lever.
The trend: As growth at home slows, Chinese internet platforms are recycling capital into frontier markets like Pakistan and Bangladesh, where smartphone adoption — not existing e-commerce maturity — is the growth thesis.