Alibaba Pulling Back Investment as Daraz Faces Cost Cuts, Layoffs and Uncertainty in Bangladesh

Special Correspondent

China’s largest e-commerce company Alibaba Group is reportedly withdrawing from new retail e-commerce investments in Bangladesh and other countries, according to multiple sources. The move is said to be affecting its subsidiary Daraz, raising concerns over the future of its operations in Bangladesh.

Alibaba acquired the Daraz Group in May 2018, which operates in Bangladesh, Nepal, Sri Lanka, Myanmar and Pakistan. Since then, the company reportedly invested around Tk 17 billion in Bangladesh. However, sources say Alibaba is now shifting its global focus toward artificial intelligence (AI) and cloud-based services.

According to industry sources, Alibaba has already signed agreements related to AI and cloud infrastructure expansion with companies including Meta, and is investing heavily in infrastructure in Hong Kong. The company is also shifting away from retail e-commerce toward a supplier-driven model and business-to-business (B2B) operations, positioning Bangladesh more as a sourcing hub than a retail market.

This strategic shift is being linked to a halt in new investment in Daraz.

Cost-cutting, restructuring and layoffs

Current and former Daraz employees say the company has adopted aggressive cost-cutting measures. Senior leadership changes have already taken place, with CEOs of Daraz operations in Pakistan and Nepal reportedly removed from their positions. Daraz Bangladesh CEO Ben Qing is now overseeing operations in multiple countries.

Large-scale layoffs have also been reported across Daraz Bangladesh. Employees claim that nearly 40 percent of staff were reduced ahead of Eid-ul-Azha compared to earlier this year, and the downsizing process is still ongoing. Many employees are reportedly searching for alternative jobs amid growing uncertainty.

For the first time, delayed salary payments have also been reported within Daraz Bangladesh. Mid-level employees say salaries for managers and above were not paid on time in May but were later cleared. However, various benefits and payments to service providers, including vehicle vendors, reportedly remain pending.

Former employees also allege that promised benefits, including gratuity and notice-period compensation, have not been fully paid.

One former employee said that even staff with less than six months of service typically received Eid bonuses in previous years, but this time no such bonuses were paid despite large-scale layoffs.

Operational pressure and financial concerns

Sources within the company say that Daraz Bangladesh has been instructed by its headquarters that no further external investment will be made, and the company must now operate solely based on its own revenue.

The target is reportedly to reach break-even within the July–September quarter, failing which no further subsidies may be provided for operations.

Some reports suggest operational expenses are partially being covered through loans from Standard Chartered.

Cost-cutting measures include office downsizing, with two floors of its Banani headquarters already vacated. Offices and logistics hubs in Tejgaon and other areas have also been partially shut down. A company-owned land asset in Kaliganj, Gazipur, is reportedly being considered for sale.

Daraz currently employs around 1,000 people in Bangladesh, but only about one-third are regular employees; the rest work as contract riders, outsourced staff or freelancers. Further reductions are reportedly under consideration.

Disruptions have also been reported in logistics and delivery operations due to unpaid wages and protests. Some workers reportedly went on strike, causing delays in order deliveries.

Future uncertainty

A senior source said Daraz has been given until September to achieve financial self-sufficiency. If it fails to do so, the company may have no option but to shut down operations.

However, alternative strategies are also reportedly being considered, including leasing logistics infrastructure or forming partnerships or mergers with other investors.

Daraz Bangladesh has no investors other than Alibaba, making continued operations heavily dependent on its backing.

Company officials could not be reached for comment, as a senior corporate affairs executive is currently abroad. However, Daraz has officially dismissed claims of halted investment, stating that no such decision has been communicated and that any such move would be announced publicly.