Support The Moscow Times!

Mail.Ru to Enter $2 Billion Kremlin-Backed Venture With Alibaba

Bloomberg

Chinese e-commerce company Alibaba is setting up a $2 billion joint venture with billionaire Alisher Usmanov’s internet services firm Mail.ru to strengthen the Chinese company’s foothold in Russian e-commerce.

Asia’s most valuable company signed an accord Tuesday with Mail.ru to merge their online marketplaces in the nation of more than 140 million people. The deal is backed by the Kremlin through the Russian Direct Investment Fund and the local investors will collectively control the new business. Mail.ru’s global depository receipts traded in London jumped as much as 12 percent.

The combined company will be better able to compete with local rivals Wildberries and Yandex. Alibaba’s Russian unit AliExpress mostly sells goods imported from China and hasn’t had to worry about competition from Amazon.com Inc. because the U.S. behemoth has little presence in the country.

“A big part of what we’ve been able to develop so far in Russia has been our cross-border business,” Alibaba President Mike Evans told reporters. “But the future, which will require the presence of our partners at this table, will involve building a much bigger local business.”

The parties inked the deal at a Vladivostok economic forum attended by President Vladimir Putin and Alibaba Chairman Jack Ma. The Chinese company had been negotiating a similar deal with Sberbank, Russia’s largest bank, but abandoned talks after the lender partnered with Yandex instead. Alibaba recently rolled out Tmall for Russia after winning consumers through AliExpress.

Ma, who started Alibaba.com in 1999 as a business-to-business marketplace with 17 co-founders, this week announced plans to step back from the Chinese e-commerce titan. His company, which is pushing into overseas markets from Southeast Asia to Russia, last year saw daily package deliveries reach 55 million.

… we have a small favor to ask.

As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just 2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Continue

Read more