Russia's Sberbank makes a move in e-commerce with deal

Russia's Sberbank makes a move in e-commerce with deal
Sberbank makes a move in e-commerce segment.
By bne IntelliNews January 28, 2021

Russia's largest bank Sberbank has made an important addition to its digital ecosystem Sber by signing a memorandum of intent on the joint development of marketplace, controlled by major electronics retailer M.Video-Eldorado. 

As reported by bne IntelliNews, unconfirmed reports previously suggested that Sberbank was considering a partnership with M.Video-Eldorado online platform or possibly with M.Video itself. The bank was also said to be eyeing the country's second-largest online electronics retailer, Citilink.

Prior to reported negotiations with M.Video and Citilink, Sberbank's joint venture with Yandex.Market with Yandex internet major ended up in a bitter divorce. Sberbank's bid for Ozon, the e-commerce player, also fell through, and Ozon made a successful $1.2bn IPO instead.

Now, with M.Video's, a binding agreement could be signed in 1H21 post the comprehensive audit and all regulatory approvals.

"Acquisition of marketplace adds also electronics segment to Sber’s e-commerce with 85% ownership, implying RUB35bn investment, or 0.7% of equity. Looks neutral at this stage," BCS Global Markets commented on January 28, while affirming a Buy call on Sberbank shares. is set to become “Sber’s key multi-category e-commerce venue,” in synergy with such other Sber assets as SberLogisticsSberMarketSber Eapteka and Samokat, reports East-West Digital News (EWDN). currently offers 18 main categories with 2.5mn products, says Sber. But this young marketplace  launched less than three years ago  is not a heavyweight in Russia’s online retail space. In 2019, it ranked only 26th among the country’s e-commerce sites, according to Data Insight, with sales reaching RUB8.7bn rubles ($135mn at that time’s exchange rate).

However, by combining’s assets with those of Merlion’s  the leader in the segment of electronic appliances, number two e-commerce site in Russia (2019)  Sber could establish a firm foothold in e-commerce, or even contend for leadership in this space.

So far, the financial and digital giant has failed to do so, as its alliance with Yandex and its attempt to take control of Ozon equally failed last year.

After the potential deal, 10% will be retained with M.Video-Eldorado and 5% owned by the founder and co-owner of, Alexander Tynkovan, (current ownership: 80% belongs to M.Video and 20% to Alexander Tynkovan).

"The announced joint development of with SBER should lead to increased competition in the Russian e-commerce space, potentially affecting the likes of OZON and Yandex.Market," Sova Capital commented on January 28, while viewing the deal as currently neutral for Sberbank.

The deal values at about RUB41bn, implying a 2020 estimated Enterprise Value/Gross Merchandise Value in the ballpark of 3-4x (assuming no debt), Sova analysts estimate.

"We think the news does not bode well for OZON and YNDX’s e-commerce vertical Yandex.Market, as Sberbank and M.Video partnership to develop is likely to intensify competition in the Russian e-commerce space," Sova notes.

Any increase in pressure from more competition could also affect AliExpress Russia (AER), an e-commerce JV developed by (which holds a 15% stake in AER), Alibaba, MegaFon and RDIF. 

That said, the effect on could be mixed, since the company's O2O partnership with Sberbank, as well as its delivery asset Samokat, could actually benefit from the integration with, Sova Capital believes.

Market research agency Data Insight expected online sales of physical goods in Russia to reach RUB2.5 trillion in 2020 ($34bn) and potentially some RUB7 trillion ($90bn) by 2024, reports EWDN. 

Boosted by the pandemic, online retail skyrocketed in Russia last year, as exemplified by e-commerce leader Wildberries (+96%) and the online activity of such retail majors as X5 Retail Group (+362.2%)Detsky Mir (x2.4) and Azbuka Vkusa (x2).

The market is highly fragmented. Russia’s five largest online retailers and marketplaces account for under a quarter of the total industry. By comparison, Amazon alone controls half of the US commerce market, and more than a third in key European countries.

Among the top players on this market are notably: Wildberries, which saw its sales jump to some $6bn in 2020; Ozon, which was introduced triumphantly on the NASDAQ in November 2020; AliExpress Russia, a joint venture involving Alibaba, Mail.Ru Group, Russian telco MegaFon and sovereign fund RDIF; and Yandex.Market, which raised $1bn earlier in mid-2020 to support its ambitious plans.