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AliExpress Russia, an e-commerce joint venture between Chinese e-commerce giant Alibaba and Russian partners, said it expects $ 10 billion in annual turnover by 2022-2023.
CEO Dmitry Sergeev, which did not provide details on current turnover, told Reuters the company could consider an initial public offering (IPO) in three to four years, although he named the existing shareholding structure «optimal».
According to some analysts, the current annual turnover of the company is is about $ 6 billion.
«We completely localize the business and build a separate company here», – Sergeev said in an interview, adding that this means improving the search function in Russian and expanding the network of local sellers.
He said that AliExpress Russia wants to increase the share of Russian sellers on the platform to 50% by 2022-2023, adding that purchases in China now dominate the business. He also said the company is targeting 50 million customers a year..
«At the time of the creation of our joint venture, the share of local business was about 10% (in the company's turnover). It has now doubled. Our ultimate goal is a cross-border to local business ratio of about 50-50».
The joint venture between Alibaba, the Russian Direct Investment Fund, mobile operator Megafon and Internet company Mail.Ru is one of several players that is expanding its business in the Russian e-commerce market worth about RUB 2 trillion ($ 28 billion).
The main shareholder of the joint venture is Alibaba Group with a 55.7% share. Megafon owns 24.3%, Mail.ru Group – 15% and the Russian Direct Investment Fund (RDIF) – 5%.
Experts from the Moscow Higher School of Economics estimated that the volume of goods to Russians from abroad in 2019 sent to $ 6.5 billion. A spokesman for the Russian Postal Service said more than 90% of foreign shipments came from China, most of which are due to online orders through AliExpress Russia.
Sergeev said that AliExpress Russia will invest in logistics to reduce delivery times from China from 20 to 10 days, stating that this can be achieved with the help of local Russian partners.
«I believe that the value of owning the entire logistics infrastructure is overstated», – he said, adding that there are a number of possible partners for this.
He did not rule out mergers and acquisitions, saying that small players could lose as the market consolidates..