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Last year, Alibaba increased its stake in the Singapore-based firm from 51 percent to 83 percent with an additional billion-dollar investment. Alibaba acquired control of Lazada in 2016 with an initial $1 billion investment.
Including Monday's announcement, Alibaba will have ponied up a total of $4 billion to invest into Lazada, which has operations in Indonesia, Malaysia, the Philippines, Thailand, Vietnam and Singapore.
Alongside the investment, Alibaba said that the start-up would also have a new CEO.
Lucy Peng, a co-founder at Alibaba and currently Lazada's chairwoman, would take on the additional role from current chief Maximilian Bittner.
Bittner, who has been CEO since 2012, will take on a senior advisory role at Alibaba.
Southeast Asia is a lucrative market for e-commerce players as millions of first-generation internet users embrace online shopping.
The region's internet economy is expected to grow to $200 billion by 2025, primarily driven by growth in e-commerce.
Last year, Amazon entered the market for the first time by launching its express, same-day delivery service, Prime Now, in Singapore.