Sberbank, Russia’s national savings bank, and Alibaba Group are in discussions to create a joint venture that would include the Chinese group’s existing cross-border e-commerce businesses in Russia and neighboring countries.
Among these businesses is AliExpress.ru, a B2C marketplace that has asserted itself as the largest e-commerce platform in Russia, far ahead of its foreign or even Russian competitors.
In exchange for its financial, marketing and technological support, Sberbank would get an at least 50% stake in the joint venture, which would be registered as a Russian legal entity.
These talks, which have just been reported by Kommersant, involve members of the Russian government, presidential administration and central bank.
According to an unnamed source of the business daily, the parties are close to an agreement, which might lead to the creation of the joint venture in the first half of 2017.
“We’re talking about the creation of a business of several billion dollars of valuation, which will become the largest cross-border e-commerce player in Russia and a range of other countries,” said this source.
Even Alibaba’s cross-border businesses in Turkey could potentially be included in the deal.
However, there is no certainty about the outcome of these talks, while the involved parties have declined to confirm or comment on them.
A plan inspired by international tech giants
The media first reported that Sberbank was working on a project to launch a national e-commerce ecosystem in November 2016. In addition to using its own resources, the state-owned bank considers gathering a variety of organizations around a common technological platform to build a comprehensive B2C and B2B offer.
The plan is inspired by the ecosystems which Google, Amazon and Facebook as well as Tencent and Alibaba have set up in their respective countries.
Sberbank initially considered alternatives to a partnership with Alibaba. Among these alternatives were a deal with Russian Internet giants Yandex or the Mail.Ru Group, or an exclusively in-house development strategy.
Sberbank’s president German Gref paid a visit to Alibaba’s headquarters during a trip to China, according to Kommersant.
The Chinese group, which opened a Russian company in 2015, may be regarding the potential agreement with Sberbank as a way to obtain easier access to the markets of the Eurasian Economic Union (EAEU). Alibaba may also aim to overcome bureaucratic barriers and overtaking its competitors in Russia, notes Russia Beyond the Headlines.
According to EWDN’s latest industry report, the Russian e-commerce market reached approximately $16.3 billion in 2016 (physical goods only), including an estimated $4.3 billion for cross-border sales, mainly from China. The market keeps growing in spite of the economic crisis.
Over the past few years, several other leading Russian institutions have announced joint investment projects with Chinese partners in the field of technologies. Among these institutions are Russia’s sovereign fund RIDF, tech corporation Rostec, the nanotech giant Rusnano, and Sistema, an industrial and technological conglomerate.
This article first appeared in East-West Digital News, the international online resource on Russian digital industries, and is reprinted with permission.