Yandex and Sberbank (Russia’s state-owned bank), announced their plans to create “a leading e-commerce platform” through a Joint Venture, expanding on the Yandex.Market eCommerce marketplace.
According to their announcement, Sberbank will invest $500 million in the joint venture and that will value Yandex.Market at $1 billion post money. The two partners would own equal stakes in the joint venture (JV), with up to 10% of the shares allocated to a stock option plan for Yandex.Market’s management and employees.
Yandex.Market will continue to operate under the current management team led by CEO Maxim Grishakov. He will join the board of directors of Yandex.Market, which will also include three other representatives from Yandex and three representatives from Sberbank.
The Yandex.Market eCommerce platform market share used to dominate the Russian ecommerce marketplace but now struggles against Chinese AliExpress (Alibaba’s B2C subsidiary) and Avito.ru, the country’s first classifieds site that allows businesses to sell as well. Other big players include Ozon and Ulmart although many purchases happen from Chinese eCommerce websites such as JD.com.
Avito.ru’s 2016 total revenue is $192.5 million, up 75% from 2015. In October 2015 Naspers became the largest shareholder with a $1.2 billion investment, valuing the site at $2.7 billion.
Yandex.Market has increased its control of fulfillment and delivery operations. Two years ago the Yandex.Delivery service launched, aggregating offers from several eCommerce shipment services.
Now Yandex.Market intends to go even further: “We will build [our own] logistics and delivery system to aggregate goods in warehouses and offer the best delivery price conditions to our customers,” said Maxim Grishakov, CEO of Yandex.Market, in a recent interview.
Online sales in Russia in 2016 exceeded $26 billion, growing more than 20% year-on-year, $16 billion for physical goods and $10 billion for online travel. Yandex.Market has a monthly audience of over 20 million users and about 10 percent of the market.