China: Alibaba Group discusses JV with Russia’s Sberbank

A logo of Alibaba Group is pictured at its headquarters in Hangzhou, Zhejiang province, China, October 14, 2015. REUTERS/Stringer CHINA OUT

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.

Also Read:

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Russia: Sberbank, Sistema forge strategic partnership 

 

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.