Synagie, established in Singapore in 2014, has grown into a leading digital commerce solutions provider in the Southeast Asian region. Synagie's business covers

 comprehensive services for well-known brands such as Nike, Estée Lauder, and lululemon, including logistics and warehouse management, advertising promotion, keyword optimization, and pricing strategies.

Alibaba Group, as the controlling shareholder of Synagie, strengthened its influence in the company through privatization in November 2020. Subsequently, Hong Kong's Huide Acquisition-Z Company 

(stock code: 7841.HK) submitted an updated application to the Hong Kong Stock Exchange on July 1, 2023, planning to acquire Synagie through a Special Purpose Acquisition Company (De-SPAC). 

This acquisition is expected to lead to Synagie's listing on the Hong Kong Stock Exchange. After the transaction is completed, although Alibaba's shareholding ratio will decrease from 47.22% to 27.79%, 

it will still maintain its position as the largest shareholder.

The development of Singapore's local company Synagie is quite eye-catching, from being privatized by a Chinese company to planning to list on the Hong Kong stock market, which undoubtedly 

reflects Alibaba Group's far-reaching strategic layout and business considerations.

However, as a proxy operation company, Synagie usually involves two types of businesses: one is the D2B business that charges service fees to brand customers, and the other is the D2C business 

that purchases products from brand customers and sells them to consumers through e-commerce channels.

This business model may not be eye-catching at first glance because it does not directly obtain products from producers. As an intermediary, the products Synagie sells are purchased from the brand side, 

which may not have a significant advantage in cost control. The financial report data shows a grim reality: although the company's revenue is increasing, the profit is not growing accordingly, indicating that 

the company is facing a challenging operating situation.

The reason is simple: the company's main source of income is the D2C business, and as the total transaction volume (GMV) of e-commerce platforms in the Southeast Asian region continues to rise, Synagie's

 D2C business revenue is also increasing.

However, due to high procurement costs, the increase in revenue has not led to corresponding profit growth, but has had a negative impact on the company's overall gross profit.

What is more worrying is that Synagie may face the risk of further losses and may not be able to get rid of the current situation of increasing revenue without increasing profits in the short term.

Alibaba's Countermeasures

As 2024 approaches, competition among e-commerce platforms in the Southeast Asian region is expected to intensify further. Shopee, the only company in the region to achieve annual profitability, 

is planning to increase investment to consolidate its market position and expand market share. TikTok Shop has set an ambitious goal for 2024 to achieve a GMV of $50 billion, more than double its previous target 

of $20 billion.

In this fierce market competition, Alibaba Group is obviously not going to stand by. At the end of May this year, Alibaba invested an additional $230 million in its Southeast Asian subsidiary Lazada, bringing

 its total investment in Lazada to about $7.7 billion.

This focus on the Southeast Asian market may be one of the reasons for promoting Synagie to go public in Hong Kong through the De-SPAC method. Compared with traditional IPOs, De-SPAC acquisitions are 

usually a more convenient way to go public. Synagie has completed its PIPE round of investment, which is expected to bring more than 600 million Hong Kong dollars in cash injection to the company.

For Alibaba, whose market value has fallen by nearly 80% from its peak, every penny must be carefully calculated. Promoting Synagie to go public to raise funds, rather than direct investment, may be 

Alibaba's strategic choice. However, even if Alibaba takes the lead in investing, it is difficult to change the market's view that Synagie's business model is not attractive enough and its investment value is limited.