About HKTDC | Media Room | Contact HKTDC | Wish List Wish List () | My HKTDC |
繁體 简体
Save As PDF Print this page

JD.com Joins AliExpress as China Takes on Russia's E-commerce Giants

Strategic alliances have seen two of China's leading e-commerce operators challenge domestic dominance of Ozon.ru.

Photo: JD.com: Seeking 20% of Russia’s e-commerce market.
JD.com: Seeking 20% of Russia's e-commerce market.
Photo: JD.com: Seeking 20% of Russia’s e-commerce market.
JD.com: Seeking 20% of Russia's e-commerce market.

China's online shopping giants have rewritten the e-commerce rulebook in Russia, with JD.com the latest interloper to be making notable waves. Its arrival in the country was preceded by that of AliExpress, now the country's most significant e-commerce platform.

AliExpress expanded into Russia last October, quickly overtaking Ozon.ru, commonly referred to as Russia's Amazon. By Christmas last year, AliExpress' position seemed unassailable. In spring this year, however, JD.com made its own move. The Beijing-headquartered portal made rapid inroads into the Russian market, largely on the back of its comprehensive nationwide delivery service.

The key to its success has been its partnership with SPSR, one of Russia's top five logistics operators and a company that has its own strategic alliances – notably with the Russian Post and Russian Railways. SPSR's tie-up with JD.com has seen it become its official carrier in Russia, with the e-commerce operator investing heavily in building up the Russian company's logistics capabilities.

Under the terms of this alliance, SPSR will handle all the operational issues, delivery and integration of resources, while JD.com will concentrate on marketing and product development. JD.com has already invested in additional warehousing facilities in those areas where SPSR currently lacks sufficient resources.

According to the industry sources, JD.com's current plan is to have a 20% stake in Russia's e-commerce market within five years. In monetary terms, it is aiming for a turnover of US$10 billion per year, with a throughput of 100,000 parcels per day. Overall, the average individual transaction value is expected to be between $40.00 and $200.00, with the sum likely to vary in line with particular customs clearance issues in Russia and shifting consumption patterns.

In truth, JD.com is not a newcomer to the Russian market, having first begun operations there two years ago. Its alliance with SPSR, however, has seen it move up several gears, allowing it to offer wider distribution and faster delivery times.

In line with this, JD.com has now launched a comprehensive Russian language version of its site, prior to an intensive marketing campaign scheduled for the autumn. Both the campaign and the Russian language site will have a particular focus on electronics and electric appliances, with these sectors deemed priorities for the country's consumers.

SPSR currently has nine distribution centres in Russia, collectively servicing some 200 local offices. The company also has in place more than 1000 postamats [automated pick-up points] in various regions of Russia. In Russia, only EMS Garantpost offers a comparable service and it is already tied into deals with a number of the country's domestic e-commerce operators.

This streamlining of e-commerce operations, as well as the country's somewhat liberal regime with regard to cross-border shopping by individuals, opens up considerable opportunities for companies targetting the Russian market. It will, particularly benefit those who currently lack the resources to physically expand into the country or those who want to test market specific products before committing more fully.

Leonid Orlov, Moscow Consultant

Content provided by Picture: HKTDC Research
Comments (0)
Shows local time in Hong Kong (GMT+8 hours)

HKTDC welcomes your views. Please stay on topic and be respectful of other readers.
Review our Comment Policy

*Add a comment (up to 5,000 characters)