Alibaba and JD.com Eyeing the Russian Market
Chinese e-commerce companies Alibaba and JD.com are eyeing the Russian market. They have both recently formed partnerships with Russian companies in the e-commerce space.
- Alibaba will form a joint venture AliExpress Russia JV with the Russian Direct Investment Fund and two Russian companies, MegaFon and Mail.ru Group.
- JD.com partnered with Russian e-commerce platform Yandex.Market in a deal that will see the latter begin selling JD.com goods from this month.
Alibaba and JD.com Eye Russian Market
Chinese e-commerce companies Alibaba and JD.com have recently stepped up their presence in Russia.
Alibaba announced in early June that it will turn its platform AliExpress Russia into a joint venture by forming a new company AliExpress Russia JV together with sovereign wealth fund the Russian Direct Investment Fund and two Russian companies, MegaFon and Mail.ru Group. Alibaba will invest $100 million in the joint venture. AliExpress is Alibaba’s international B2C e-commerce platform that helps Chinese merchants sell to overseas consumers.
JD.com has formed partnerships with Russian e-commerce platform Yandex.Market under which Yandex.Market will sell JD.com goods on its platform starting this month. Yandex.Market is an e-commerce joint venture between Russian search engine Yandex and Sberbank, one of the largest banks in Russia. In 2015, Yandex set up an office in Shanghai to help Chinese merchants tap the Russian market.
AliExpress Active on Cross-Border E-Commerce
AliExpress has recently actively building its cross-border e-commerce capabilities. AliExpress opened to overseas merchants for the first time in May, allowing small and medium-sized merchants in Russia, Turkey, Italy and Spain to sell on the platform. Before that, only Chinese merchants could sell on the platform.
Russian Consumers Buy Chinese Goods Online
China has been a major exporter to Russia and cross-border e-commerce trade between the two countries has been increasing. According to data from China’s Commerce Ministry, China-Russia cross-border e-commerce trade reached $3.7 billion in the first nine months of 2018, up 23% year over year. The popularity of Chinese goods in Russia has made both Alibaba and JD.com step up the pace of developing their businesses in the country.
The increasing number of Russian online shoppers will likely drive further demand for imported goods. According to e-commerce company eShopWorld, the online shopping penetration rate was 56.1% in Russia in 2018 and is estimated to reach around 61.4% in 2020.