Alibaba makes more inroads into Russian e-commerce

May 4, 2015 11:48 AM

Over the past few weeks, AliExpress has multiplied initiatives to strengthen its leadership on the Russian e-commerce scene. The Chinese giant has teamed up with Russian online bank Tinkoff Bank to launch a co-branded loyalty program.

Associated with MasterCard credit and debit cards, this program is the first of its kind in the world, said Mark Zavadskiy, AliExpress business development director in Russia.

AliExpress customers in Russia will enjoy bonus points for any purchases made using these cards. The bonuses amount up to 5% of purchase value on AliExpress and 1% for purchases made with any other merchant. Bonus points can be spent on AliExpress. Card holders may benefit from special, up to 30% discounts on AliExpress and from 3% to 9% on Tinkoff’s online travel agency.

“Under this program AliExpress and Tinkoff will leverage and develop their large client bases across Russian regions,” Zavadskiy said.

AliExpress has also made mobile payment methods available to its Russian consumers, Zavadskiy announced. Alibaba’s in-house payment system Alipay has partnered with Russian payment company Rapida and mobile solution provider Soyuztelecom. These payment methods has been made available to subscribers of the four main Russian mobile operators — Beeline (VimpelCom), MegaFon, MTS and Tele2 — with a commission fee of 1% to 3%.

Cheap Chinese stuff paid for by mobile

Mobile payments have been developing fast over the past few years in Russia, with all major mobile carriers launching ambitious mobile payment platforms. So far, however, this payment method has been used essentially to settle utility bills and online services rather than for online purchases of physical goods, as analyzed in EWDN’s e-commerce research. “In a certain sense we’re pioneers in this field,” Zavadskiy commented.

Another announcement concerned personal data storage. Starting from 1 September 2015, according to Russian legislation, businesses will be requested to have Russian citizens’ personal data stored exclusively on servers located on Russian territory. Following a meeting with state regulator Roskomnadzor on April 13, AliExpress Chinese and Russian executives confirmed their intent to comply with this rule. The statement came just days after a similar announcement by eBay and its subsidiary PayPal.

The Chinese company also confirmed its intention to open soon a fully fledged representative office in Russia.

Meanwhile, the AliExpress free Android app has become number one by the number of downloads on Google Play — ahead of social networks and IM services, which traditionally lead the ranking. The AliExpress Apple app, however, is not as successful, noted e-commerce publication Oborot.

The Chinese company has even made an educational animation that helps new users get accustomed to purchases on the site. The cartoon is 1.45 minutes long. Posted on Youtube on April 15, the film has got less than 6,000 views as of today.

Earlier this year AliExpress also signed a partnership with SPSR Express to enhance its delivery capacities across Russia. The Russian operator has decided to invest “up to $10 million” in developing a network of hundreds of pick-up points specially dedicated to AliExpress.

Last year, the Chinese e-commerce giant became the number one e-commerce site in Russia by traffic and the number of orders. The marketplace shipped several hundreds of thousands parcels every day to Russian consumers as of late 2014, according to East-West Digital News’s expert pool.

Mr. Zavadskiy is expected to speak at the eDays international e-commerce conference which will be held on June 4 and 5 in Moscow.

This article first appeared in East-West Digital News, the  international online resource on Russian digital industries.




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