Page 28 - RusRPTJul23

2.11 China’s Aliexpress becomes only e-commerce site to lose sellers
Aliexpress Russia turned out to be the only Russian marketplace with an
outflow of sellers, Kommersant writes, citing a study by Tochka Marketplaces.
In January-May year on year, 27% of sellers left the site.
Competitors at this time grew rapidly. At Sbermegamarket, to which Sberbank
recently bought the Russian Stockmann, the number of sellers increased by
120%, at Ozon and Yandex Market it almost doubled (+ 92% and + 89%
respectively), and even at the leader famous for his tough policy Wildberries
market grew by 36%. The total number of sellers on online platforms in Russia
has grown by one and a half times.
These estimates are in line with the understanding of the market. The CEO of
Infoline-Analytics, Mikhail Burmistrov, estimated the outflow of sellers from the
Russian AliExpress at 30%, he considers the growth of the Sbermegamarket
base to be threefold, and estimates that of Wildberries at 50%. According to
the expert, the local business "AliExpress Russia" "is now mainly represented
by KazanExpress."
A drop in indicators for Aliexpress Russia was also observed in terms of
money - in 2022, its sales decreased by 47%, to RUB56.2bn . And VK in the
first quarter wrote off almost RUB10bn from the depreciation of its stake in the
joint venture.
What's the matter? What is happening is a direct consequence of the Chinese
Alibaba's refusal to invest in the Russian partnership, which became toxic due
to sanctions after the start of the war in Ukraine. The Bell spoke about this in
detail. Alibaba Group (47.85%) is the largest shareholder of Aliexpress Russia.
The Russian co-owners also refused to invest in a loss-making asset: the first,
after the change of owners and even before the war, VK (15%), and after - the
USM holding of Alisher Usmanov (24.3%) and the Russian Direct Investment
Fund (12.8%). Partners simply have no resources left: maintaining growth
rates in the Russian e-commerce market now requires tens of billions of rubles
a year. As a result, the company curtailed all promotion, the development of its
own logistics, cut 50% of the staff and actually closed the local segment. The
face of the Aliexpress advertising campaign, Maxim Galkin, recognized as a
foreign agent, fell into disgrace.
Competitors at this time developed their ecosystems, advertised heavily, lured
sellers and mastered parallel imports (which Alibaba would never have
approved on the Russian Aliexpress). The market itself has changed and
matured - sellers often go to several sites at once. In addition, it is no longer
possible to return to it only due to fast cross-border logistics, in which
Aliexpress Russia claimed the championship. Growth potential remains in
unique regional offerings and bulky shipping, participants say.
28 RUSSIA Country Report July 2023 www.intellinews.com