Online shopping accounts for just 4% of all retail sales in Russia, but Mail.ru, the parent company of the country’s top social network VK, is confident that a partnership with Alibaba, the Chinese e-commerce giant, will boost activity.
The two companies are linking up with mobile operator MegaFon to create a joint venture that will help to turn VK into a “one-stop shop” for online shopping and social networking.
Speaking to the Financial Times, Mail.ru’s chief executive Boris Dobrodeyev said VK’s 97 million monthly users would be able to use its app or website to shop on AliExpress, Alibaba’s main cross-border retail service.
As well as making it easier for Russian consumers to shop online, VK can tap into technology, which is similar to Tencent’s WeChat messaging service, to highlight recommendations and other content.
According to the Financial Times, a payment system that integrates Alibaba’s Alipay with Mail.ru’s technology is also expected to be agreed later this year.
“Imagine, if you combine Tencent and Alibaba on one market, this is what’s really happening in Russia,” said Dobrodeyev. “This isn’t happening anywhere else. Facebook and Amazon are separate, Tencent and Alibaba are separate, and we are putting it all together.”
With Amazon largely absent from Russia’s e-commerce market, the partnership is also expected to benefit Alibaba, especially as the Gaidar Institute think-tank has estimated that China accounted for as much as 90% of all the 290 million parcels sent to Russia last year.
AliExpress already has some 20 million Russian users and the number of cross-border shoppers are likely to grow as Russia’s postal service rolls out an improved logistics system, especially in the crucial city of Vladivostok and routes through to Siberia and the Urals.
As for VK’s expansion plans, Dobrodeyev also expected the social platform to gain from the frequency with which its users shop there.
“We think the biggest value in the transactional economy is not your average spend but how often users use your service,” he said.
“Even if they’re not spending that much but they’re using it 15-20 times a month, you have a huge advantage over the player where people spend more but only use it once a month.”
The two companies are linking up with mobile operator MegaFon to create a joint venture that will help to turn VK into a “one-stop shop” for online shopping and social networking.
Speaking to the Financial Times, Mail.ru’s chief executive Boris Dobrodeyev said VK’s 97 million monthly users would be able to use its app or website to shop on AliExpress, Alibaba’s main cross-border retail service.
As well as making it easier for Russian consumers to shop online, VK can tap into technology, which is similar to Tencent’s WeChat messaging service, to highlight recommendations and other content.
According to the Financial Times, a payment system that integrates Alibaba’s Alipay with Mail.ru’s technology is also expected to be agreed later this year.
“Imagine, if you combine Tencent and Alibaba on one market, this is what’s really happening in Russia,” said Dobrodeyev. “This isn’t happening anywhere else. Facebook and Amazon are separate, Tencent and Alibaba are separate, and we are putting it all together.”
With Amazon largely absent from Russia’s e-commerce market, the partnership is also expected to benefit Alibaba, especially as the Gaidar Institute think-tank has estimated that China accounted for as much as 90% of all the 290 million parcels sent to Russia last year.
AliExpress already has some 20 million Russian users and the number of cross-border shoppers are likely to grow as Russia’s postal service rolls out an improved logistics system, especially in the crucial city of Vladivostok and routes through to Siberia and the Urals.
As for VK’s expansion plans, Dobrodeyev also expected the social platform to gain from the frequency with which its users shop there.
“We think the biggest value in the transactional economy is not your average spend but how often users use your service,” he said.
“Even if they’re not spending that much but they’re using it 15-20 times a month, you have a huge advantage over the player where people spend more but only use it once a month.”
Sourced from Financial Times; additional content by WARC staff
