Via Bidness ETC : JD.com is diving into another e-commerce face-off with Chinese industry giant Alibaba; this time, the competition is in Russia
Today, JD.com Inc. (NASDAQ:JD) announced to expand its growing e-commerce platform further. Bloomberg Business reports that the Chinese startup has prepared a new online shopping destination for Russia. With the website available in Russian language, the company hopes that its latest move will spark growth beyond the home market.
On Tuesday, while talking to reporters in Moscow, the company’s country head Victor Xu said: “Russia is Europe’s largest Internet market by audience and has fast-growing e-commerce.” He added: “We aim to become a market leader in Russian e-commerce.”
JD.com hopes that a new international retail arm will fend off competition from the e-commerce powerhouse, Alibaba Group Holding Ltd (NYSE:BABA). Alibaba has quickly gained market traction in Russia, boasting 19.6 million monthly users on its shopping platform, Aliexpress. According to TNS, a research company, this categorizes the website as one of the 10 most popular ones in the country, as its audience increased 65% this year.
Much of Alibaba’s foreign market momentum can be accredited to the economic downturn, which made shoppers hunt for cheaper goods.
JD.com is still reeling from its IPO in the US last year, as it tries to prove its ability to sustain growth to justify its bloated $50 billion market value. However, market conditions in Russia seem rife for greater competition, and the timing is favorable for the smaller e-commerce competitor.
According to East-West Digital News research, last year in Russia, cross-border transactions peaked to $4 billion, as sales rose 75% to 70 million units. The same source added that Chinese Internet companies account for 70% of the volume, and half of the value.
JD.com has already agreed to accept online payments in Russia, through Qiwi PLC (NASDAQ:QIWI), and Sberbank of Russia’s Yandex. The Chinese company also agreed to collaborate with SPSR Express, a local express-delivery operator, to ship goods within Russia.
Mr. Xu declined to expand on the prospective investments in Russia, or to discuss the sales target.