This was reported by the Financial Times, who noted the presence of Russia’s Direct Investment Fund (RDIF) indicates a high level of official government backing for the initiative. “This is an important investment and it is very much part of the digital silk road,” said one Russian source familiar with the talks, speaking to the FT. The size of the investment has not been made public, but the source said its scale was ambitious.
Alibaba executive chairman, Jack Ma, has visited Russia several times in recent years, even sharing a stage with Russian president Vladimir Putin, and has said that “Alibaba should join forces in developing Russia”. The company has long seen Russia as an important future growth market, given the lack of Western internet giants in the country.
Meanwhile, the head of the RDIF, Kirill Dmitriev, said the organisation soon planned to announce “investment in a number of our internet platforms with the aim of expanding their operations abroad as well as investment with Alibaba in internet logistics infrastructure in Russia”.
Mail.ru is a large Russian internet company that controls the most visited website on the Russian internet, the social networking service VKontakte. In addition to the company’s social sites, it owns instant messaging assets, email, cloud storage, search and e-commerce capabilities.
Several reasons lie behind the deal. First, both Beijing and Moscow are keen to increase investment in Russia, especially in light of the sanctions imposed on the country after the 2014 annexation of Crimea, which had been part of Ukraine. For Alibaba, Russia is already one of the biggest markets for its AliExpress foreign e-commerce service.
Success for Russia’s domestic economy dovetails neatly with a long-term Chinese foreign policy goal, that of the ‘digital silk road’. As part of China’s Belt and Road Initiative, Beijing aims to roll out its significant IT infrastructure abroad and claim a part in the global growth of these technologies around the world. China has already invested heavily in the digital development of several South and Southeast Asian countries, as well as more traditional infrastructure investments such as airports, ports, and railways.
Sourced from the Financial Times, Alexa, Chatham House; additional content by WARC staff