By Muneerah Bee
The Russian Direct Investment Fund (RDIF), the sovereign wealth fund of the Russian Federation; e-commerce company Alibaba Group; PJSC “MegaFon”, a pan-Russian operator of digital opportunities (MegaFon); and internet and IT company Mail.Ru Group announced a new strategic partnership to integrate Russia’s key consumer internet and e-commerce platforms and launch a leading social commerce joint venture in Russia and the Commonwealth of Independent States (CIS).
Under the partnership, the parties will form a new joint venture (JV) by leveraging on the existing businesses of AliExpress Russia. Collectively, the parties will inject new capital, strategic assets, leadership, resources and expertise to create an “unmatched” value proposition for merchants, consumers and internet users across Russia and the CIS, as well as accelerate the development of Russia’s rapidly growing digital economy.
Alibaba Group will contribute AliExpress Russia into the JV, which will consist of Alibaba Group’s current Russia-based domestic and cross-border operations, including its global retail marketplace business, AliExpress, and first-party B2C business, Tmall, in Russia. Further, Alibaba Group will inject cash into the JV along with other resources to support the business of the JV.
RDIF will invest new capital into the JV and acquire additional JV shares from Alibaba Group to become a strategic shareholder of AliExpress Russia with a 13% stake, while MegaFon will sell its 10% stake in Mail.Ru Group to Alibaba Group in exchange for a 24% stake in AliExpress Russia.
Additionally, Mail.Ru Group will contribute its Pandao e-commerce business, cash and distribution product integrations in exchange for a 15% stake in AliExpress Russia. AliExpress Russia and Mail.Ru Group will enter into a strategic cooperation agreement relating to, among other things, traffic and product initiatives.
The JV is also planning to broaden the ecosystem and lifestyle use cases by investing into another business together with Mail.Ru Group, including foodtech and other initiatives. Following the completion of the transactions, which are subject to customary closing conditions and respective corporate approvals to be obtained by the JV’s partners, AliExpress Russia will be owned by Alibaba Group (48%), MegaFon (24%), Mail.Ru Group (15%) and RDIF (13%). The JV will operate across all e-commerce segments, including cross-border and local marketplaces and first-party retail.