Photo/Lan Suying (NBD)

In response to the sudden decline of the e-commerce business, Daraz, an e-commerce platform of Chinese internet giant Alibaba Group in South Asia, announced an 11% layoff, joining the growing list of tech companies who are tightening their belts in response to the global economic downturn.

Daraz is a Pakistani company and was acquired by Alibaba from Rocket Internet in 2018. In the past five years, the active shoppers of Daraz have quadrupled to more than 15 million. Daraz stated in 2021 that benefiting from its leading position in South Asian markets, it aims to double orders annually over the next five years.

In an open memo to employees posted on the website, Daraz CEO Bjarke Mikkelsen said that the turmoil in Europe and a surge in inflation had disrupted supply chains and the economy in 2022, slowing user growth. Mikkelsen added that the layoff was "to prepare the company for the current market realities, and to ensure that Daraz is set up for long-term prosperity".

"Despite the headwinds, our business is still growing. In the past 12 months, we have made progress on a unit economics basis," he said.

Daraz is one of a number of privately owned companies acquired by Alibaba as it moves into foreign markets, and other acquirees include Southeast Asian e-commerce platform Lazada Group and Turkish e-commerce company Trendyol.