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Fintech & E-commerce
October 2020 www.intellinews.com I Page 13
The Russian e-commerce market, RUB bn
Russia’s economy may have been battered by the coronacrisis and GDP growth will be lackadaisical at best, but e-commerce continues to grow in double digits and is set to account of all retail turnover within the next four years, according to Sova Capital. And rate of growth of the biggest companies is far in excess of the sector as a whole, with all the leading players reporting growth on the order of 80% a year. If anything, the coronacrisis has only catalysed the shift from bricks and mortar retail to e-commerce, accelerating the pace of change.
Interfax published an interview with Yandex.Market CEO Maxim Grishakov on 12 October where he goes into some detail of Yandex’s plans for its market place. Below is a write-up published by Sova Capital drilling into some of the details.
Strategy remains intact. As part of its strategy until 2023, Yandex.Market seeks to (1) start generating a positive adjusted EBITDA; (2) become one of Russia’s top three e-commerce players; and (3) expand its assortment to 5mn SKUs. As
a reminder, this strategy was announced in late June as part of YNDX’s purchase of SBER’s stake in Yandex.Market, and the e-commerce platform will be fully consolidated in YNDX’s Q3 financials starting from 23 July.
Faster decision-making. According to Grishakov, Yandex.Market’s decision-making has become faster and less bureaucratic following the separation from SBER. Prior to cutting ties
with SBER, Yandex.Market had its own BoD representing both YNDX and SBER that approved key decisions on a quarterly basis. At present, YNDX’s executives approve most decisions in real time, enabling Yandex.Market to move faster. Only major strategic decisions still require approval by YNDX’s BoD.
Gross merchandise value (GMV) growth. Yandex. Market’s growth peaked in April-May at 200-220% year on year, occasionally reaching 300% during that period. Summer tends to be slow for Russian e-commerce players, but sales were supported this year by fewer shoppers going on vacation. The re-opening of offline stores created a headwind. According to Grishakov, growth is currently reaccelerating, but visibility for the rest of the year is limited given the uncertainty around a second wave of coronavirus (COVID-19) and possible containment measures. Yandex.Market is working to prepare its logistics for the high season,
which could be abnormally high this year if strict lockdowns are re-imposed.
Scaling logistics to keep up with rapid GMV growth. Yandex.Market continues to open sorting centres in Russia’s large and mid-sized cities
and towns. It also plans to open 8,000-10,000 pickup points in Russia’s primary regions. Yandex.