Tinkoff enters e-commerce race as competition intensifies

Tinkoff enters e-commerce race as competition intensifies
Russia's first fully digital bank is launching an e-commerce ecosystem to help companies handle online sales.
By Theo Normanton in Moscow October 21, 2021

Russian online bank Tinkoff has launched an e-commerce venture. The new platform, a constellation of services and tools designed to help entrepreneurs handle and boost their online sales, will cater to a rapidly expanding online economy in Russia, as well as to clients hoping to grow their international presence. Tinkoff has hired Ilya Kretov, formerly eBay’s CEO for Global Emerging Markets, to direct the e-commerce business.

Owned by the publically traded TCS Group and one of international portfolio investors’ favourite stocks at the moment, Tinkoff is Russia’s first fully digital bank. It has thrived throughout the pandemic as online banking took off that lead to its shares triple in value over the last three years. It was also rated the best bank in Russia by The Banker in February this year. If much of the bank’s success to date has come from keeping pace with lifestyle shifts, the launch of its new e-commerce ecosystem is no doubt intended to continue this trend. Tinkoff is positioning itself as a “lifestyle bank” that does more than take care of customers’ money, but also facilitates spending money to organise work, household and pleasure.  

The ecosystem will provide a range of instruments to assist companies in their transition to online sales. In addition to existing products like point of sale (POS) credits, buy-now-pay-later (BNPL) service Dolyame, and Tinkoff Business and Checkout services, the ecosystem will also feature a range of new functionalities.

Before joining Tinkoff to lead its new vertical Tinkoff e-commerce, Kretov worked in a variety of senior roles at eBay, including CEO in Russia, Director of Marketing and, most recently, CEO for Global Emerging Markets.  

In a press release announcing the launch of the e-commerce business line, Kretov said “Our task is to create a fundamentally new dimension to e-commerce — to build an ecosystem where entrepreneurs would be able to find any e-commerce solution, from a single gateway to all Russian marketplaces to tools for growing their own sales in Russia and globally. The new ecosystem of services will combine Tinkoff’s existing top fintech solutions with new tools for online business development. It will help all entrepreneurs to scale their online sales in just one click.”

The announcement comes during a boom for Russian e-commerce, which is growing five times faster than the real economy, as reported by bne IntelliNews.  

As real incomes bounce back after seven years of stagnation, Russians are spending more online, a habit nourished by a series of lockdowns over the last two years. The international expansion of online store Wildberries and the growth of e-commerce major Ozon, which broke into the top 10 Russian retailers in the first half of 2021 after a $1.2bn IPO, both reflect the wealth of growth potential latent in the industry.

The race is now on for e-commerce players to capture market share and investment as online penetration spreads across Russia’s regions. This is therefore canny timing from Tinkoff, which will utilise the significant growth potential in the market to attract new customers hoping to get the edge over other online vendors whether through profitability, customer retention, or simply rapid scaling.

Fedor Bukharov, Director of Tinkoff Business, said “Tinkoff Business is a leader in providing financial services for small and medium-size businesses; we currently support the online presence of over 700,000 companies. We are a purely online company by nature — we know how to do business online and strive to share our experience, services, and best practices with our clients. I am confident that with Ilya’s help we will become leaders in online business services — his experience and knowledge teamed with Tinkoff’s DNA and approach will allow us to conquer this market and bring it to new heights.”