Russian eCommerce Giant Ozon Looks Toward FinTech Offerings

Ozon, the Russian version of Amazon and the country’s second-biggest player in the digital commerce space, is looking to expand its operations into groceries and financial services, the Financial Times reported on Tuesday (April 13).

Headquartered in Moscow and one of Russia’s biggest technology firms, the company intends to apply for a banking license, in hopes of extending smaller businesses an easy way to tap affordable FinTech services, CEO Alexander Shulgin told the news outlet.

“Small and medium-sized businesses find it hard to get financing on convenient conditions. It is either too costly or unavailable,”  Shulgin told FT. 

He added that Ozon has analyzed the turnover rates of merchants’ products in addition to examining user engagement. “We see their goods’ turnover rate, we see their customer engagement, we see their conversion rate, we store their goods — all that data let us make an informed decision on what size loan sellers need to do business,” he said.

Ozon has in excess of 45,000 debit card users and is now looking to advance into deposits as it expands into financial services. The firm competes with Russia’s biggest online retailer, Wildberries — which acquired a bank — as well as the country’s search engine Yandex, which also is considering a similar purchase. 

Russian state lender Sberbank is also eyeing a move into the tech and eCommerce space and hopes to encourage a boost in the digital landscape of shopping, delivery, and entertainment options, in addition to financial services. Shulgin told the Financial Times that Ozon declined a partnership with Sberbank in 2020.

Logistic bottlenecks and the country’s size have so far prevented Ozon from being profitable even as it worked to dominate Russian eCommerce.

Ozon in November 2020 saw its shares escalate 40 percent in the opening of its U.S. IPO, which notched $1 billion. Ozon is the first Russian company to hold an initial public offering (IPO) in the nation in nearly five years.