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Alibaba’s Lazada Grocery Business Is Getting a Boost in Sales From Coronavirus

By John Ballard - Mar 2, 2020 at 10:03AM

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Consumers in countries impacted by COVID-19 are staying indoors, and that could benefit the e-commerce powerhouses.

With more than 89,000 confirmed cases worldwide of COVID-19, many investors are recommending "stay-at-home" stocks to ride out the short-term turbulence. The performance of Alibaba's (BABA 4.92%) e-commerce grocery business, Lazada, is a reason why. 

RedMart is Singapore's leading online supermarket site and operates as part of Lazada. The store is currently experiencing "unprecedented demand," Lazada CEO James Chang recently told CNBC, as customer orders have soared for everyday essentials like food and household products. 

A supermarket basket pulling a computer mouse.

Image source: Getty Images.

Adopting the online lifestyle

The demand is surging as the number of COVID-19 cases recently rose in Singapore. Currently, there are 106 confirmed cases of the coronavirus to date in Singapore.

While the surge in online ordering will no doubt escalate in the short term over fears of further spreading of COVID-19, it could also convert some people who haven't yet migrated to digital ordering. E-commerce is growing much faster than retail sales, but it still makes up less than 15% of global commerce. 

Other than Alibaba, which controls about half of China's online retail market, Amazon.com's Prime service could also see new converts in the short term.

Some concern exists over whether the outbreak will put too much strain on these e-commerce operations. However, Chang told CNBC that they have expanded capacity, such as delivery vehicles and drivers, which is easing the pressure to fulfill the orders.

All told, while many companies will be hurt in the short term over COVID-19, this could be a strange scenario that just pushes more people to adopt the convenience of shopping from home, which could push China's Alibaba further into the retail lead.

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