Sberbank, Russia’s national savings bank, and China’s Alibaba Group are discussing the creation of a joint venture (JV) that would integrate Alibaba’s existing cross-border e-commerce businesses in Russia and neighboring countries, including B2C marketplace AliExpress.ru.
The terms of the JV would see Sberbank maintain a 50 per cent equity interest, in exchange for financial, marketing and technological support. Sberbank would get an at least 50% stake in the joint venture, which would be registered as a Russian legal entity.
According to a report by Kommersant, the talks involve members of the Russian government and central bank as well and are close to an agreement which might see the JV launch in H1 2017. It potentially involved Alibaba’s cross-border businesses in Turkey.
Sberbank was reportedly developing a national e-commerce ecosystem in November 2016, with the aim of gathering various partners to share a common platform enabling B2B and B2C e-commerce.
For Alibaba, which maintains a Russian subsidiary, this new deal has a compelling rationale and is strategic in nature. Besides easing access to the markets of the Eurasian Economic Union (EAEU), such a JV could see Alibaba bypass regulations and bureaucracy, granting it a decisive competitive advantage.
In an exchange with Russia Beyond The Headlines, Oleg Remyga, China director at the Skolkovo Moscow School of Management, said, ““It is no secret that Sberbank is positioning itself as the most innovative bank [in Russia], and access to Alibaba Group’s new financial and banking technologies will help it obtain that status.”
However, given the political dimensions of such a JV, diplomatic tensions within the EAEU may inhibit the growth of such a JV. Alternatively, such a JV could help ease diplomatic tension through its ability to foster greater e-comerce trade amongst the member nations of the EAEU. But it also raises the long-term question of whether China’s Silk Road infrastructure initiative synchronises with Russia’s Central Asian ambitions.