Lukashenko says he may quit as president
Belarus hits EU with tit-for-tat sanctions
Belarusian police introduce colour-coded torture system for detained protesters
Kremlin publicly condemns Belarusian police brutality in hint of growing frustration with Lukashenko
Russian services PMI rises to 48.2, but remains underwater as recovery continues to slow
Russia to start mass vaccinations on December 7
Azerbaijan’s Aliyev calls on Armenia, Russia, Turkey and Iran to assist in creating Nakhchivan land corridor
FPRI BMB Russia: Sberbank releases a three-year transformation strategy to e-commerce concern
Ukraine’s banking sector continues recovery, but profits still lagging last year
Ukraine’s real wages up over 10% in October but have been stagnant in dollar terms for almost a year
FPRI BMB Ukraine: Public has confused opinions on resolving the Donbas conflict
Western Balkans plus Ukraine subsidised coal with over €900mn in 2018-2019
Estonian parcel robot firm Cleveron eyes €30mn state loan
Estonia’s chief auditor says €1bn in state COVID-19 loans issued haphazardly
Economic sentiment in CEE falls in November as recovery momentum splutters
Estonian animation studio Imepilt to hold IPO
Brighter days ahead: The economic bounce back in 2021
Central, Southeast Europe stock markets jump in anticipation of COVID-free future
VISEGRAD BLOG: An easing of trade tensions but still an uncertain situation for export-oriented Central Europe
Hungary's PM risks isolation as Poland mulls dropping EU budget veto
Poland ready to back down from veto of EU budget
Hungary's ruling party in damage control mode after MEP sex scandal bombshell
Poland’s PMI remains stuck just above the improvement line at 50.8 in November
Czech companies dominate this year’s Deloitte Technology Fast 50 CE
Coronacrisis to get worse before it gets better forecasts wiiw
EU diplomats say no chance of Bulgaria removing veto for Skopje to start EU accession talks
IMF says downside risks to Albanian economy are increasing
EU ministers fail to agree on launch of accession talks with Albania and North Macedonia
Western Balkans commit to green agenda and regional common market at Sofia summit
Bosnia’s opposition ousts nationalist parties in major cities
Bosnia’s main ethnic parties fight to hold onto power in local elections
Southeast Europe’s EU members to get biggest boost from next budget and recovery funds
Bulgaria imposes 3-week lockdown to slow down COVID-19 spread
CEE politicians highlight trade and security ties as they congratulate Biden
Breakaway Transnistria fully under Sheriff’s control as Obnovlenie party sweeps board in parliament election
Moldova’s presidential election is over, now the battle for the parliament begins
Moldova’s foreign policy reset
Russian establishment quick to congratulate Moldova's new president-elect
Rising COVID-19 cases put intense pressure on CEE healthcare systems
MEPs urge European Commission to act against Hungarian media financing in North Macedonia and Slovenia
North Macedonia mulls decriminalising cannabis to boost tourism
Retail surpass pre-crisis peak as Romanians shop instead of holiday
Romanian venture capital firm Catalyst launches new €40mn-50mn fund for TMT
Aegon to sell its CEE business to Vienna Insurance for €830mn
The state is back in business
Slovenian PM Jansa stands alongside Hungary and Poland in EU rule of law row
BEYOND THE BOSPORUS: Turkish number crunchers deliver November inflation surprise of 14%
Erdogan needs to go says analyst assessing Turkey’s economic collapse
Ukraine strikes deal with Turkey to produce killer drones instrumental in Karabakh conflict
In Karabakh deal, as many questions as answers
Protesters flood Yerevan demanding Armenia’s “traitor” PM quit over Nagorno-Karabakh surrender
Who emerge as the real winners from the bloody Nagorno-Karabakh conflict?
Below average 2020 wine production destined for volatile and uncertain global market
Iran calls on Saudis to limit $67bn defence spending to Tehran’s $10bn
Iranian prosecutors pledge to pursue Trump for Soleimani killing even after he leaves White House
No reaction from Kazakh elites as bombshell FT report says Nazarbayev’s son in law siphoned millions from pipeline scheme
UK court freezes $5bn in assets connected to fugitive Kazakh banker Ablyazov
Attack of the Debt Tsunami: global debt soars to a new all-time high
Kyrgyzstan's proposed new constitution provokes widespread revulsion
Kyrgyzstan's China debt: Between crowdfunding and austerity
CFC joins RWC in assessing KAZ Minerals buyout offer as under-valuation
China business briefing: Not happy with Kyrgyzstan
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
Mongolia’s wrestling culture: From the grasslands to the cage
No surprises in Tajikistan as Rahmon retains presidency with 91% of vote
A Tajikistan poised on verge of economic calamity set for vote
Tajikistan revives on-off dispute with Iran
Turkmenistan: The dammed united
Turkmenistan: Everybody yurts, sometimes
Dirty money investigation reviews identified payments worth $1.4bn linked to Turkmenistan
Uzbekistan unveils extensive privatisation programme
Download the pdf version
Russia’s leading e-commerce companies have reached critical mass and are in the process of creating a new economy that will shift much of Russia’s GDP into the cloud.
In the last months the big three – Ozon, Yandex and Sberbank – have announced plans that accelerate and crystalise their businesses going from sites that just sell things to entire ecosystems that become a market in their own right.
A string of deals has been announced and, in Ozon’s case, an IPO is on the cards later this year to raise more money to pay for the work.
Russia’s economy may have been battered by the coronacrisis and GDP growth will be lackadaisical at best, but e-commerce continues to grow in double digits and is set to account of all retail turnover within the next four years, according to Sova Capital. And rate of growth of the biggest companies is far in excess of the sector as a whole, with all the leading players reporting growth on the order of 80% a year. If anything, the coronacrisis has only catalysed the shift from bricks and mortar retail to e-commerce, accelerating the pace of change.
Interfax published an interview with Yandex.Market CEO Maxim Grishakov on 12 October where he goes into some detail of Yandex’s plans for its market place. Below is a write-up published by Sova Capital drilling into some of the details.
Strategy remains intact. As part of its strategy until 2023, Yandex.Market seeks to (1) start generating a positive adjusted EBITDA; (2) become one of Russia’s top three e-commerce players; and (3) expand its assortment to 5mn SKUs. As a reminder, this strategy was announced in late June as part of YNDX’s purchase of SBER’s stake in Yandex.Market, and the e-commerce platform will be fully consolidated in YNDX’s Q3 financials starting from 23 July.
Faster decision-making. According to Grishakov, Yandex.Market’s decision-making has become faster and less bureaucratic following the separation from SBER. Prior to cutting ties with SBER, Yandex.Market had its own BoD representing both YNDX and SBER that approved key decisions on a quarterly basis. At present, YNDX’s executives approve most decisions in real time, enabling Yandex.Market to move faster. Only major strategic decisions still require approval by YNDX’s BoD.
Gross merchandise value (GMV) growth. Yandex.Market’s growth peaked in April-May at 200-220% year on year, occasionally reaching 300% during that period. Summer tends to be slow for Russian e-commerce players, but sales were supported this year by fewer shoppers going on vacation. The re-opening of offline stores created a headwind. According to Grishakov, growth is currently reaccelerating, but visibility for the rest of the year is limited given the uncertainty around a second wave of coronavirus (COVID-19) and possible containment measures. Yandex.Market is working to prepare its logistics for the high season, which could be abnormally high this year if strict lockdowns are re-imposed.
Scaling logistics to keep up with rapid GMV growth. Yandex.Market continues to open sorting centres in Russia’s large and mid-sized cities and towns. It also plans to open 8,000-10,000 pickup points in Russia’s primary regions. Yandex.Market uses third-party courier services and has its own courier platform that launched in November 2019. The platform currently covers Moscow, St. Petersburg, Krasnodar and Rostov, with other 1mn+ cities in the pipeline. The in-house courier platform is successfully leveraging YNDX’s navigation services for real-time routing optimisation.
Yandex.Market is piloting on-demand delivery in collaboration with Yandex.Lavka, which is part of YNDX’s Taxi vertical. On-demand delivery means that when a customer makes a purchase with next-day delivery, the purchase comes to a sorting centre that night. The following day, the customer opens an app and orders delivery for exactly when he or she is ready. The delivery should then take no more than 15-20 minutes. Regardless of whether this particular pilot project takes off, we see considerable scope for synergies between YNDX’s e-commerce and mobility verticals.
Expanding assortment. Yandex.Market’s product range includes 1.5mn SKUs, up from 900,000 in May. The product range should reach 2mn by YE20, as Yandex.Market is adding new merchants to its platform. Grishakov sees the 2023 target of 5mn as “valid”.
Small market share and large ambitions. In the words of Grishakov, Yandex.Market’s marketplace currently holds only 1-2% of the Russian e-commerce market, while the company’s price-comparison platform accounts for around 15%. Grishakov did not quantify where he sees Yandex.Market’s share in 2023 (remember that the company wants to be in the top three), but he expects there to be two to three huge marketplaces and a number of specialist and niche players.
Deeper integration into YNDX’s ecosystem. There are still areas where Yandex.Market is working with SBER, including SBER’s Spasibo loyalty programme and Sberlogistics. On the other fronts, collaboration between Yandex.Market and SBER has significantly narrowed, as YNDX is pursuing the deeper integration of Yandex.Market into its own ecosystem. In particular, there are big plans for integration with Yandex.Plus. Another initiative is offering Yandex.Market’s merchants a single virtual cabinet with streamlined access to all of YNDX’s ecosystem, from Yandex.Direct to Yandex.Zen.
Grishakov reiterated that the Beru brand will be retired. Both the marketplace and price comparison platform will now operate under the single Yandex.Market banner.
No plans to re-launch cross-border marketplace. Yandex.Market closed its cross-border service Bringly last year and remains sceptical about the segment, which involves long delivery times and customs clearance while showing slowing growth.
Legal structure optimisation. After cutting ties with SBER, YNDX has been optimising the legal entities making up Yandex.Market to reduce the number of intercompany transactions and to simplify processes.
Yandex.Market employs around 1,500 office staff and is hiring new people in logistics.
Yandex.Market IPO off the table. We understand that Yandex.Market now relies on YNDX for financing, and it sees no point in holding an IPO as a separate business.
Valuation and action. “We have a HOLD rating on YNDX, which is trading at 2020-21 EV/EBITDAs of 37.2x-25.1x and P/Es of 76.5x-46.0x,” Sova Capital said in the note.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request have been expired. Please,
Access recover request have been expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at email@example.com
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: