The joint venture will work to support Russia’s consumption upgrade
The transaction to form a joint venture in Russia for Alibaba Group has closed, the e-commerce giant said Wednesday.
First announced in September 2018, Alibaba-owned AliExpress, which is Russia’s most-popular shopping site, along leading Russian internet company Mail.ru Group, Russian mobile-telecommunications operator MegaFon and sovereign-wealth fund Russian Direct Investment Fund (RDIF) have joined forces to create what they call a one-stop destination for merchants, consumers and internet users across Russia and the CIS to communicate, socialize, shop and play games, within the same online ecosystem.
Russia’s Federal Antimonopoly Service last June had cleared the JV to move forward. Now, AliExpress Russia JV is majority-owned by Russian shareholders, with a board of directors comprising executives from RDIF, Alibaba Group, MegaFon and Mail.ru Group. Mail.ru Group CEO Boris Dobrodeev is chairman of the board, while AliExpress Russia Head Liu Wei and First Deputy Chief Executive Officer of Mail.ru Group Dmitry Sergeev will serve as co-CEOs of the JV.
In addition to the regulatory approval in June, the companies had signed “definitive documents” in Moscow to transition the JV to majority-Russian ownership but with a board of directors made up of representatives from all of the JV companies. Also, one co-CEO would be nominated by Alibaba and a second by Mail.ru Group. Alibaba had nominated Wei, while Mail.ru nominated Sergeev. They were scheduled to take on their new roles once the transaction closed.
The JV and Mail.ru Group will enter into a strategic cooperation agreement relating to, among other things, traffic and product initiatives. The JV also will promote its services on Mail.ru Group’s platforms through exclusive product-integration and marketing solutions, the companies said.
In addition to blending social media and e-commerce, the joint venture will work to support Russia’s consumption upgrade by delivering a greater selection of products to the market. For Russian small and medium-sized enterprises, it’s a chance to tap a newly connected ecosystem in the domestic market while accessing over 600 million consumers using Alibaba’s platforms, including in China, Southeast Asia, Turkey, Europe and India.