Should SingPost fret over Alibaba's acquisition of Lazada?

With Lazada’s expected sales volume surge, it shouldn’t.

There have been doubts in the past that Alibaba's acquisition of Lazada might jeopardise SingPost's businesses with Alibaba. But should SingPost feel threatened?

According to Maybank Kim Eng analyst John Cheong, Lazada may act more like a sweetener than a threat to SingPost, as it will boost the postal services provider's internal revenue.

"SingPost could benefit from increased volume from more Lazada collaboration with Alibaba, to enable local retailers to sell their products across each other’s platform," Cheong said.

More so, he claimed that SingPost would greatly benefit from the Lazada's online festival event as it is expected to spike up sales volume three to five times.

"If this takes off, increased outbound China deliveries could boost SingPost’s international revenue," he stressed

The analyst also noted that the discussion with Alibaba on its second investment in SingPost has already been progressing.

"Alibaba’s volumes are still growing consistently and this demonstrates its operational commitment in partnering with SingPost in our view. Alibaba’s volumes are mostly captured under SingPost’s international-mail revenue," he said.