Aliexpress Russia shareholders refuse to finance company
Before the war, Aliexpress Russia — the biggest Russo-Chinese joint enterprise — was poised to become the “Russian Amazon.” But it appears that the conflict has persuaded China’s Alibaba that its international reputation is worth more than the Russian market. As The Bell reported, the Chinese company has decided to curtail its investments in Russia.
- In the early days of the war, Alibaba told its partners that it would no longer put money into developing the Aliexpress Russia project, said three sources in the Russian e-commerce sector. Prior to the war there was no hint of a problem, according to them — on the contrary, the shareholders (Alibaba with 47.85%, billionaire Alisher Ushmanov’s USM with 24%, tech company VK with 15% and Russia’s state investment fund with 12.8%) — had ambitious plans.
- “Alibaba is a publicly listed company trading on the New York Stock Exchange, it has many ties to American markets and institutions,” one source told The Bell. “Nobody is going to kill that for a Russian project. Especially given the uncertain prospects for growth in this market due to the war and sanctions.” The source added that Alibaba’s refusal to invest was a trigger for the other shareholders.
- Since Russia’s invasion of Ukraine, Aliexpress Russia has shed 700 employees, more than half its pre-war staff, another source told The Bell. The joint venture also curtailed its biggest logistics projects, and almost completely stopped its advertising and marketing work. Notably, the face of that advertising campaign, comedian Maxim Galkin, is also in disgrace. In September, Russia’s Ministry of Justice added Galkin to its list of individuals designated as “foreign agents.”
Why the world should care
It’s become increasingly clear that Chinese are not prepared to risk falling foul of sanctions in order to preserve ties with Russia. But this joint venture is a particularly significant casualty: the documents to establish it were signed during a summit between Russian President Vladimir Putin and Chinese leader Xi Jinping.