Sberbank, the biggest lender in Russia, and Russian search company Yandex are launching a new internet marketplace dubbed Beru that has ambitious plans to become the Amazon of Russia.
According to a report in the Financial Times citing the companies, the $1 billion joint venture was rolled out earlier in the week and is part of Sberbank's efforts to diversify. Russia is one of the few markets that hasn’t drawn the big technology heavy-hitters like Amazon. At the same time that there is a dearth of competition, analysts have said the economy in Russia is situated for growth, given online retail accounts for only 3 percent of the total spend. That is compared to 18 percent in the U.K., reported the Financial Times, citing data from trade body AITC. The report noted the five leading eCommerce players in Russia control around one-quarter of the market. Beru will face competition from AliExpress Russia, which is a $2 billion venture between Alibaba of China and Mail.ru, the search rival to Yandex in Russia. The new company, noted the report, is merging Alibaba’s current businesses in Russia into a new platform that hopes to take advantage of Mail.ru’s social media popularity. The paper noted it owns two of the most popular social media platforms in the country.
The Financial Times reported that the new venture between Yandex and Sberbank may be the beginnings of a bigger deal between the two, with two Russian media outlets reporting last week that Sberbank was in talks to acquire control of Yandex. The reports have been denied by both companies. Arkady Volozh, Yandex’s chief executive, said in a statement earlier this week to the FT that he isn't leaving the company or selling any of his 48 percent stake. He did say he backed the board’s efforts to “develop the company and evaluate various possibilities for managing the capital structure.” Three people close to Sberbank and another person close to Yandex told the paper the two companies are in talks about more investments, but nothing has been finalized. Lev Khasis, the Sberbank first deputy chief executive in charge of the “ecosystem” strategy, said the lender was open to more deals with Yandex in areas such as food delivery.
The Beru website will have 1,000 individual sellers from Yandex. Markets will be on one single platform with the goods for sale being collected in a fulfillment center in Moscow. The goods will be dispatched by couriers from there. The assignments for couriers will be selected via algorithms, with most orders placed in Moscow delivered the next day, noted the report. Beru will provide free delivery nationwide on purchases that are more than 3,500 rubles. Customers can also pick up the packages in one of the 16,000 plus Sberbank branches around the country.