Page 125 - RusRPTJun19

Currently, cross-border e-commerce is dominated by AliExpress. In China, JD.com is a major competitor to Alibaba's Tmall. AliExpress is is likely to become a joint venture between Alibaba, MegaFon, Mail.ru and Russian Direct Investment Fund in the near future, which is a major e-commerce conglomeration to compete with Yandex-Sberbank. China accounts for about 90% of total cross-border shipments to Russia and about a half of Russia's cross-border e-commerce turnover. In 2018 online imports increased by 29% y/y to RUB 348bn ($5.4bn). In the meantime Russia's largest online retailer Wildberries accused Yandex.Market in redirecting traffic to the marketplace on Yandex search engine. Wildberries claimed on May 29 that Yandex.Market appeared second or third in the search results on "Wildberries online shop" and similar inquiries.
Russian internet major Yandex will allow the clients of its food delivery service Yandex.Eda (Yandex.Food) to place orders on behalf of their employers, similarly to corporate accounts already functioning for Yandex.Taxi service, Kommersant daily reported on May 23 citing unnamed sources. The daily reminds that Delivery Club, Yandex.Eda main competitor controlled by Mail.ru major, has tested the corporate deliveries about five years ago and does not intend to repeat the exposure. Since Yandex.Taxi has launched its corporate tariffs in April 2016, the number of corporate users has jumped 2.5-fold to 23,000, with the B2B launch of Yandex.Eda being reportedly prepared by the same team. Various estimates of online food delivery market stand at about RUB4.6bn, out of which Delivery Club controls RUB1.9bn and Yandex.Eda about RUB1.3bn, according to Kommersant. Sberbank CIB investment bank valued Yandex.Eda at $357mn. Analysts surveyed by the daily believe that for Yandex.Eda corporate segment could grow to 15-20% of revenues, as the competition in the B2B segment is lower. Delivery Club does not plan to return to the corporate segment, the representatives of the company told Kommersant. But the company in partnership with DC Daily develops vending machines distributing packaged food in Moscow's business centres.
GLONASS-TM, a company launched in early 2018, intends to deploy an Internet-of-Things (IoT) network across Russia as part as a “government assignment,” reports East-West Digital News (EWDN). The network will be used to monitor, collect and analyse data in a variety of fields. It will help “control the state of the country’s transportation infrastructure, security systems, meteorological and ecological monitoring and waste utilization management systems,” the company’s general manager Denis Simakin told the business daily RBC.
EPAM’s 1Q19 financial results came in above consensus and the company’s earlier guidance. The company left its FY19 guidance for revenues and operating margins unchanged, but increased its EPS guidance. Meanwhile, we continue to believe that the company’s strong performance is more than priced in. Based on management’s guidance, the stock trades at 2019F P/S of 4.4x and P/E of 33x (on non-GAAP basis), which we see as quite demanding. Sell reiterated.
Russian electronic payment system Qiwi reported Ebitda jump of 61% year-on-year and 59% quarter-on-quarter to RUB2.34bn ($36mn) in the first quarter of 2019, while net income increased by 53% y/y. Qiwi posted strong results in the previous quarters, but the profitability of the company throughout 2018 were pressured by investment in new projects Sovest, Tochka and
125 RUSSIA Country Report June 2019 www.intellinews.com