As the Russian e-commerce market is entering a new growth and concentration cycle, the joint venture formed by Yandex and Sberbank, launched two online marketplaces over the past few weeks.
One of them, dubbed ‘Beru’ (“I’ll take it”), became fully operational in early November, after five months of beta testing. The platform features “over 1,000 retailers and 600 shopping categories, from household appliances, to cosmetics, to dry grocery goods,” claims Yandex.
An online pharmacy enables users to order medications online and pick them up from over 10,000 physical pharmacy outlets.
In contrast with Yandex.Market, the popular e-commerce aggregation and price comparison platform launched in 2000, Beru presents itself as an integrated marketplace – similar in many respects to the Amazon marketplace. Not only can users can make purchases from multiple categories on one platform: payment and delivery operations are also managed by Beru.
Yandex went as far as integrating Alice, its AI-powered voice assistant launched last year, to the platform: users may choose and purchase products on Beru by just saying: “Alice, help me buy on Beru.”
Faster delivery at lower costs
Orders are processed and delivered from a Moscow-based fulfillment center, which allows Beru to provide “more reliable and affordable shipping options across Russia.”
The platform promises to deliver next day in Moscow and to provide an “improved delivery experience to the far regions of Russia” – where shipping services are often characterized by long wait times and significant costs.
“With Beru, Yandex is using its technological developments to create a greater e-commerce experience,” stated Maxim Grishakov, CEO of Yandex.Market.
Beru’s Moscow fulfilment center. Photo credit: Yandex
In late November, the Yandex-Sberbank JV also introduced Bringly, an e-commerce platform for cross-border shopping.
Bringly claims to offer “over four million products from the world’s most popular brands.” These include virtually anything from clothing and footwear (Koton, LTB Jeans, Lumberjack…) to Korean beauty products, to such niche products as Chinese shock and water-resistant smartphones (Cubot, Nomu).
Bringly’s first major international supply agreement was inked this past summer with Turkish Ziylan Group, a major manufacturer and seller of footwear.
Bringly aims to improve logistics and delivery times with a Latvia-based warehouse for expedite shipping. Customers may also use Russian Post’s standard or express delivery service.
Shipping costs vary depending on retailer location. Delivery is free for goods purchased from China, Latvia and Turkey.
For a substantial part of its assortment, nevertheless, Bringly will compete with Aliexpress, the Alibaba subsidiary which is dominating the Russian cross-border market.
Battle of titans
In September 2018, Alibaba made an alliance with Mail.Ru Group, a leading Russian Internet group rivalling with Yandex. The two partners want to create a whole ecosystem that would encompass e-commerce, social communications and gaming.
On its side, Yandex has received massive support from Sberbank, the state-own national savings bank and Russia’s largest banking institution, in its bid for e-commerce leadership.
“Yandex has brought to the JV the Yandex.Market platform with its audience, traffic and technologies. Sberbank has injected $500 million into the JV and contributed its financial expertise, distribution opportunities and technologies,” Yandex.Market’s PR director Polina Upitis explained in an exchange with East-West Digital News.
Also christened ‘Yandex.Market,’ the JV owns the Yandex.Market, Beru and Bringly platforms.
Beru and Bringly, which are now presented separately, will ultimately “be added to [the Yandex.Market platform] to offer a comprehensive online shopping experience for Russian consumers and retailers,” Yandex announced.
“Yandex.Market is building an ecosystem which will generate, under plans, 500 billion rubles within five years [nearly $7.7 billion at the current exchange rate],” Upitis said.
Estimated at around $17 billion in 2017 (Data Insight, AKIT/AITC), the Russian e-commerce market for physical goods may grow to $31 billion by 2020 and reach $52 billion by 2023, according to a recent report by Morgan Stanley.
At more than $6 billion in 2017, (AKIT/AITC), cross-border sales account from around one third of the Russian e-commerce market. Chinese online retailers cover nearly 90% of the cross-border flows.
