Page 14 - bne_Tech_10_2020

Fintech & E-commerce
October 2020 www.intellinews.com I Page 14
Market uses third-party courier services and
has its own courier platform that launched in November 2019. The platform currently covers Moscow, St. Petersburg, Krasnodar and Rostov, with other 1mn+ cities in the pipeline. The in- house courier platform is successfully leveraging YNDX’s navigation services for real-time routing optimisation.
Yandex.Market is piloting on-demand delivery in collaboration with Yandex.Lavka, which is part of YNDX’s Taxi vertical. On-demand delivery means that when a customer makes a purchase with next-day delivery, the purchase comes to
a sorting centre that night. The following day, the customer opens an app and orders delivery for exactly when he or she is ready. The delivery should then take no more than 15-20 minutes. Regardless of whether this particular pilot project takes off, we see considerable scope for synergies between YNDX’s e-commerce and mobility verticals.
Expanding assortment. Yandex.Market’s product range includes 1.5mn SKUs, up from 900,000
in May. The product range should reach 2mn by YE20, as Yandex.Market is adding new merchants to its platform. Grishakov sees the 2023 target of 5mn as “valid”.
Small market share and large ambitions.
In the words of Grishakov, Yandex.Market’s marketplace currently holds only 1-2% of
the Russian e-commerce market, while the company’s price-comparison platform accounts for around 15%. Grishakov did not quantify where he sees Yandex.Market’s share in 2023 (remember that the company wants to be in the top three), but he expects there to be two to three huge marketplaces and a number of specialist and niche players.
Deeper integration into YNDX’s ecosystem. There are still areas where Yandex.Market is working with SBER, including SBER’s Spasibo loyalty programme and Sberlogistics. On the other fronts, collaboration between Yandex.Market and SBER has significantly narrowed, as YNDX is pursuing the deeper integration of Yandex.Market into its own ecosystem. In particular, there are big plans for integration with Yandex.Plus. Another initiative is offering Yandex.Market’s merchants a single virtual cabinet with streamlined access to all of YNDX’s ecosystem, from Yandex.Direct to Yandex.Zen.
Grishakov reiterated that the Beru brand will be retired. Both the marketplace and price comparison platform will now operate under the single Yandex.Market banner.
No plans to re-launch cross-border marketplace.
Yandex.Market closed its cross-border service Bringly last year and remains sceptical about the segment, which involves long delivery times and customs clearance while showing slowing growth.
Legal structure optimisation. After cutting ties with SBER, YNDX has been optimising the legal entities making up Yandex.Market to reduce the number of intercompany transactions and to simplify processes.
Yandex.Market employs around 1,500 office staff and is hiring new people in logistics.
Yandex.Market IPO off the table. We understand that Yandex.Market now relies on YNDX for financing, and it sees no point in holding an IPO as a separate business.
Valuation and action. “We have a HOLD rating on YNDX, which is trading at 2020-21 EV/EBITDAs of 37.2x-25.1x and P/Es of 76.5x-46.0x,” Sova Capital said in the note.