Alibaba is doing well. So well that its owner, Jack Ma, decided to expand to Russia, following long time rival eBay as well as Amazon, according to Forbes.
The move to Russia doesn’t really come as a surprise. In April, as Ma was announcing the freeze of all hiring, the company was, in parallel, increasing spending to develop its overseas business, including emerging markets such as Russia, Brazil and India.
“Alibaba Group has established a new company in Russia in order to further expand our business and support partners, and to facilitate interaction with the state authorities of Russia,” Mark Zavadsky, AliExpress Business Development Director in Russia and the CIS, told Kommersant Tuesday. Zavadsky was appointed CEO while retaining his current role as Development Director.
Alibaba grew its GMV across its retail marketplaces 40 percent, year-over-year, and saw its active buyers increase 37 percent to 350 million. It reached 289 million monthly active users on its mobile eCommerce apps in March alone, and saw $49 billion worth of mobile GMV during Alibaba’s fourth quarter. Mobile revenue (which accounts for 40 percent of total China commerce retail revenue) grew to roughly $846 million, which was a massive 352 percent annual increase from last year’s fourth quarter of roughly $187 million. Revenue, overall, saw a 45 percent year over year increase to roughly $2.8 billion from last year’s Q4 of roughly $1.9 billion.
So why Russia and why now ?
Currently, only about 30 million Russian customers shop online — less than one quarter of the total population. But numbers are on the rise. In November 2015, a report by the Association of Online Vendors noted that in 2013, the year ecommerce market reached $17 billion, up by 30 percent from 2012.
Moreover, Alibaba-owned Aliexpress is already in Russia, so the e-commerce giant is not heading into unknown territory. It can build on Aliexpress’ undeniable success – it is the most visited site in Russia with an average of 15.6 million customers a month in the second half of 2014, reports Forbes. For the sake of comparison, eBay and Amazon have 3.7 million and 1.4 million customers a month, respectively. And last but not least, RT reports that Russia’s third-richest billionaire, Alisher Usmanov, became a shareholder of the Alibaba Group of which the returns already exceeded 500 percent. So far, he hasn’t sold his shares.