FPRI BMB Russia: Sberbank releases a three-year transformation strategy to e-commerce concern

FPRI BMB Russia: Sberbank releases a three-year transformation strategy to e-commerce concern
Sberbank CEO German Gref has a vision to transform Russia's biggest bank into Russia's biggest e-commerce company
By FPRI BMB Russia December 2, 2020

Sberbank released its latest three-year strategy on December 1, and despite the bank’s rebranding to Sber, it has a ways to go to become a bona fide tech company. By 2023, Sber plans to earn just 5% of its revenue from its non-financial businesses. Come 2030, the firm hopes this figure will grow to 20-30% of net operating income.

In growing its non-financial holdings, Sberbank will focus on e-commerce, entertainment, cloud services, education, and healthcare. As Sber’s key non-financial holdings are in fast-growing sectors of the economy, their revenues should double annually, company executive Lev Khasis projects.

To achieve its ambitious goals, Sberbank is prepared to spend 4% of its capital on building its non-financial ecosystem, the bulk of which will go toward e-commerce. By 2023, Sberbank should be a top-3 market player in Russian e-commerce, and by 2030, the firm should be the industry leader.

Sberbank has made several attempts to develop its e-commerce portfolio. It sought to partner with China’s Alibaba to no success. It created a joint venture with Yandex, but relinquished it when the firms split earlier this year. And it sought to buy a 30% stake in Ozon, Russia’s original e-commerce company that just IPOed last week.

From these failures, Sberbank has reportedly learned two lessons, according to Khasis. First, if Sberbank invests in a company, it must explicitly incorporate the business into its ecosystem. Second, Sberbank must gain full control of the project.

The Bell recently reported that Sberbank is in talks with M.Video to jointly develop its Goods.ru e-commerce platform. But CEO German Gref said yesterday that Sberbank is not planning any large e-commerce purchases in the near future.

 

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This article originally appeared in FPRI's BMB Russia newsletter. Click here to learn more about BMB Russia and subscribe to the newsletter.

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