Sberbank and Alibaba abandon joint venture talks www.ft.com
Plans for an ambitious partnership between Russia’s biggest bank and China’s top ecommerce group have fallen apart after nearly a year of negotiations, people familiar with the talks have told the Financial Times.
Sberbank, which holds half of all Russian retail deposits, and Alibaba, which recorded $547bn of gross merchandise volume last fiscal year, had planned to bring that clout to bear in an ecommerce push in Russia, where more than half the 140m population use the internet daily.
The proposed tie-up was an attempt to leverage state-run Sberbank’s vast client base with the Chinese ecommerce juggernaut to sell items to customers through the bank’s app.
But the companies abandoned the discussions after falling out over how it would work, the people said.
Sberbank said: “We don’t comment on rumours.” Alibaba declined to comment.
Herman Gref, Sberbank’s chief executive, is friendly with Alibaba founder Jack Ma and has long been keen for the bank to move into technology-dominated sectors, which he sees as essential to stay relevant in a digital world. Last month, he said the bank would prioritise moves into ecommerce and medicine in addition to finance.
“About 50 per cent of businesses [in Russia] work in trade and it’s all intermediary functions. With the growth of ecommerce all physical intermediaries will be a thing of the past” in five or six years, Mr Gref said.
In August, however, Sberbank announced a new joint venture with Yandex, the Russian search engine group, that is trying to turn Yandex.Market, a shopping comparison site, into a fully fledged ecommerce company. The bank invested Rbs30bn at a valuation of Rbs60bn ($1bn) and expects to conclude the deal by the end of the year.
A person briefed on the discussions said Mr Gref turned to Yandex after talks with Alibaba fell through over who would control the joint venture, which Sberbank saw as an attempt to gain access to its customer database without offering much in return.
But another person familiar with the companies’ thinking said the talks fell through later, after Sberbank invested in the Yandex joint venture and tried to partner it with Alibaba. “Alibaba doesn’t want to work with some comparison website,” the person said.
Russia is one of the biggest markets for AliExpress, Alibaba’s cross-border ecommerce business selling from China into international markets. Cross-border retail grew 37 per cent last year to more than Rbs300bn ($5bn), about a third of the total online market.
Alibaba is holding early-stage discussions with other potential partners in Russia, but “it has to be a deal that makes sense”, the person said.
Published Date:2017-12-13