Alibaba, Mail.Ru Group and the Russian Direct Investment Fund (RDIF) are in discussions to create an e-commerce joint-venture in Russia. No official statements have been made, but unnamed insiders have told the news agency Interfax and the business daily Kommersant that the discussions are “at an advanced stage.”
Alibaba is a major player on the Russian e-commerce scene, with its two properties AliExpress and Tmall accounting for a large share of the cross-border flows (1). The Chinese giant is also developing its logistics services in Russia via is subsidiary Cainiao (2).
Mail.Ru Group’s e-commerce activities are more modest, but last year the group launched a platform named Pandao, selling Chinese products to Russian online consumers.
Mail.Ru Group already works with Alibaba: in early 2017, the two companies announced a plan to enter the international game distribution industry with an investment of $150 million.
Sovereign investment from medical robots to cross-border e-commerce
The RDIF – which has not been, to our knowledge, involved in e-commerce projects so far – recently established a new vehicle to invest in technology, as reported in late 2017. The sovereign fund’s CEO, Kirill Dmitriev, then announced future investments “together with Alibaba in Internet logistics infrastructure in Russia.”
If confirmed, an agreement with Alibaba would come as last in a series of relationships with Chinese players. Last year, the sovereign fund agreed with China Development Bank to create the China-Russia RMB Investment Cooperation Fund. The RDIF also inked a partnership with several Russian and Chinese industry players to develop and manufacture medical robots. Back in 2012, the Russian fund teamed up with China Investment Corporation to create the Russia-China Investment Fund (RCIF).
(1) Last year, cross-border sales accounted for approximately $6 billion, more than one third of the Russian e-commerce market for physical goods, according to e-commerce consultancy Data Insight and industry association AKIT (AITC).
(2) In 2016-17 Alibaba held talks with Sberbank to create an e-commerce platform, but the national savings bank ultimately decided to join force with Yandex, Mail.Ru’s archrival, to create a giant project on their own.
