China’s largest e-commerce firm, Alibaba Group Holding Ltd., has ceded control of its Russian business to form a new venture with a state fund and two technology firms, hoping that access to their consumer base with help boost its development.
Alibaba will own 48 per cent of AliExpress Russia as a result of the deal signed with Russian Direct Investment Fund, mobile operator Megafon and internet group Mail.ru during Russia’s Eastern Economic Forum on Tuesday.
The three Russian entities will have a combined 52-per-cent stake in the e-commerce platform after contributing cash, shares and other assets.
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“By partnering with Russia’s leading consumer internet platform, AliExpress Russia will leverage Mail.ru Group’s 100 million internet users across its social media, messaging, e-mail and online games properties,” the companies said.
“With access to this unique platform and user base, the JV will fill a highly complementary role in the Russian consumer lifestyle value chain, creating a one-stop platform for social, communications, gaming and shopping.”
Alibaba will contribute AliExpress Russia to the new JV, while Megafon will swap its 10-per-cent stake in Mail.ru for a 24-per-cent stake in AliExpress Russia.
Mail.ru will contribute its Pandao e-commerce business and cash in exchange for a 15-per-cent stake in AliExpress Russia, and RDIF will acquire a 13-per-cent stake in AliExpress Russia.
The parties will invest hundreds of millions of dollars into the venture, Mail.ru Group CEO Boris Dobrodeev said.
Mail.ru Group’s London-listed shares were up 10 per cent by 0836 GMT (9.36 a.m. BST).