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June 2018 www.intellinews.com I Page 5
Gazprombank’s credit services into the new digi- tal platform. This is what the Chinese companies like Alibaba or Tencent do,” an anonymous source quoted by Kommersant explained.
The project, largely based on a business alliance forged between Usmanov and Rostech’s CEO, and Putin’s former KGB colleague, Sergey Chemezov is completely in line with Kremlin’s new drive towards the digitalization of Russia’s economy. The project benefits all parties involved. It helps Rostech expand to the fast-developing high-
tech consumer market. Gazprom will benefit from “digitalizing” its financial operations. And, last but not least, Usmanov’s Mail.ru Group will upgrade its operation to a new level by equipping its existing portfolio of strong IT companies (for example: VKontakte, Odnoklassniki, Mail.ru) with a new financial platform.
Face off with “the Russian Amazon”
Arguably, the only company in Russia able to compete with Usmanov’s IT empire is Yandex. Often referred to in the west as “the Russian Google”, Yandex is the largest technology company in not just Russia, but all of Europe, and the largest search engine on the Russian-language internet (Runet). With a large presence in multiple countries of the former Soviet Union, Yandex is the fifth largest search engine in the world.
In April this year, Yandex entered a joint venture with Russia’s largest financial institution, the state- owned Sberbank, to develop the already existing Yandex.Market platform. Combining the enormous technological capabilities of Yandex with the exist- ing infrastructure and technological resources of Sberbank, the two Russian tech/financial giants hope to develop a leading business-to-consumer e-commerce ecosystem. The new business ven- ture has been valued at RUB60bn ($1bn), and both partners own equal stakes.
“Using Yandex.Market as a basis for our new project, we want to create a Russian Amazon,” head of Sberbank German Gref commented after the deal was signed.
Similarly, the CEO of Yandex.Market Maxim Grishakov stated that his company aims to “create one of the biggest players on Russia’s online retail market.”
“There are around 5-7 Russian companies that want to become the Russian Amazon. It will be an interesting competition and I will be following it with an enormous interest,” the deputy chairman of Sberbank Lev Chasis was quoted saying by the daily Delovoy Peterburg.
The new platform called “Beru” (I’ll take that) is currently in a test mode and should be launched in autumn 2018. Basically, Beru is an attempt to turn the shop aggregator Yandex.Market into a full-fledged online hypermarket, which will be selling its own products and services, in much the same fashion as Amazon. In other words, instead of redirecting its users to the partner’s websites to finalize their purchases, Beru will have its own warehouses where it will store all the products advertised on the website; the first warehouse was opened in Moscow in October 2017.
“Internet Sovereignty”
Russia is one of the few countries in the world where their national tech companies enjoy more popularity among its citizens than their American competitors. A case in point is the market position of the American Internet giant Google. According to Lifewire, in June 2017, Google occupied almost 70% of the global search engine pie, with the Chinese Baidu far behind at a second place with 18%.
While Google’s search engine is the undisputed leader among search engines in most both developed and developing countries (for example: Google has over 90% of the market share in Brazil, India, Spain, and Italy), in April 2018, Google’s share on the Russian market was “only” 43%. In fact, Yandex has been the most widely used search engine in Russia since October 2017, with a current market share of just over 53%.
Similarly, by far the most popular social networking site in the world, Facebook, doesn’t