Page 28 - BNE_magazine_bne_September 2019

28 I Companies & Markets bne September 2019
Vezet was established in 2017 by uniting Fasten Russia, Saturn, Red Taxi, RuTaxi, Lider and Vezer operators. The companty works in over 100 cities in Russia, Kazakhstan and the Czech Republic, processing over 1mn orders a day. In 2017 the group had 12.3% of the Russian taxi market, which was larger than the 10.4% joint share of Yandex.Taxi and Uber prior to the merger.
In February 2018 Yandex.Taxi and Uber have combined
their businesses in Russia, Kazakhstan, Belarus, Azerbaijan, Armenia and Georgia, investing $225mn and $100mn respectively in the new company, which was valued at $3.8bn at the time. In March 2019 Sberbank valued Yandex. Taxi's joint venture with Uber at $7.5bn. 59.3% of the joint venture belongs to Yandex, 36.9% to Uber, with the emloyees owning 4.1%.
Adding Vezet to the asset mix of the joint venture could boost its value ahead of the possible public offering. The COO of Yandex, Greg Abovsky, told Reuters last month that Yadex.Taxi was considering an IPO, without providing more details.
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VTBC takes the deal as positive for Yandex, although needing more information on Vezet's financials. Unaccounting for Vezet, the analysts have a Buy recommendation on Yandex with unchanged 12-month target price of $46 implying an estimated total return (ETR) of 14%.
BCS Global Markets believes that the acquisition of Vezet could add 25-30% to Yandex.Taxi’s gross merchandise volume (GMV) run-rate.
"The deal’s valuation looks very attractive to Yandex – a mere 0.4 Enterprise Value to GMV implied for Vezet ($300-400mn deal), we estimate, suggesting clear value accretion for Yandex.Taxi, which, we believe, deserves 1.5 EV/GMV multiple, and could make better use of the traffic currently flowing through Vezet," BCS GM argues.
Online taxi booking, carsharing and car-pooling is an emerging business in Russia, attracting investment and already subject to fierce competition. The total Russian carsharing and taxi market in 2017-2025 will grow 2.5-fold to RUB1.6 trillion ($24bn), as estimated by Sberbank CIB.
Wildberries overtakes Sportmaster as Russia’s biggest clothes retailer
Ben Aris in Berlin
The e-retailer Wildberries has overtaken the bricks and mortar franchise Sportsmaster as the biggest seller of clothes in Russia as an e-commerce store becomes the biggest outlet for a product group for the first time ever.
Sportmaster was founded by Dmitry Doichen and brothers Nikolai and Vladimir Fartushnyaki in 1992 and has long been the biggest seller of fashion and apparel in Russia. The chain and its franchises has over 500 stores throughout Russia, Belarus, Ukraine, Kazakhstan, China but in recent years
its revenue growth has been constrained by the number of new stories it could open. The company earned revenues of RUB51.5bn ($791mn) in the first half of this year.
Wildberries is Russia’s biggest e-commerce site and has been growing in leaps and bounds in recent years. It founder, Tatyana Bakalchuk, became Russia’s second ever female billionaire earlier this year after the company's revenue broke through the $1bn mark.
And Wildberries' growth has not slowed. Revenues jumped again in the first half of this year, up by 79% as the store branches out, but clothing remains a core product offering of the group.
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Wildberries posted revenues of RUB85bn ($1.3bn) in the first six months of this year, with clothing, shoes and accessories account- ing for three quarters (73%) of its turnover, or RUB62.4bn ($959mn) of this, according to Vyacheslav Ivashchenko, Wildberries Development Director, as cited by Kommersant.
It is the first time that an online store has become bigger than its real world counter part to become the biggest retail outlet of its kind in the Russian market.
Experts at the Infoline news agency believe that the change of hands in the leader baton is permanent and also expect that Sweden’s H&M to overtake Gloria Jeans, which was also founded at the start of the 90s to sell jeans to the post-Soviet market and has also been a market leader for decades, to take third place in the clothing retail business.
Russians have embraced e-commerce which is growing literal- ly ten-times faster than the real economy and traditional retail. Online sales currently account for about 4.5% of Russia’s total retail turnover, but that has been more or less doubling very year in recent years and is on course to take up 8% of retail turnover by 2021.