“Crocodile from the Yangtze River Moves to the Ocean”

"Crocodile from the Yangtze River Moves to the Ocean"

Before “declaring war” to the American multinational e-commerce corporation eBay, Jack Ma, co-founder of Alibaba Group, once said: “eBay may be a shark in the ocean, but I (Alibaba Group) am a crocodile in the Yangtze river. If a crocodile fights a shark in the ocean, it will lose, but if we fight in the river, the crocodile will win.” Not many years have passed since the open confrontation in 2003-2006, when the crocodile won in the river, but he never wanted to stay within it’s shores. Almost all of the largest Alibaba Group projects are developing towards the international market or in cooperation with foreign partners.

The last few months have been marked by significant steps towards Russia. In May 2019, Russian companies, along with Italian, Spanish and Turkish companies, were able to sell their products internationally on the AliExpress platform. On June 5 2019 , Alibaba Group, Russian Internet giant Mail.ru Group, Russian company MegaFon, and Russian Direct Investment Fund (RDIF) signed an agreement of the establishment of a joint venture “AliExpress Russia”. The company is currently operating within Russia in the form of a representative office.

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This month, a further important step for the AliExpress project was also made, as on August 2nd, the Russian President signed the Ratification act of the Russia-China Agreement for the cooperation in the field of peaceful application of global navigation satellite systems GLONASS and Beidou. The alignment of two navigation systems is required by the new Russia-China Bilateral Road Transportation Agreement (Transportation Agreement), which entered into force in January 2019.

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The New Transportation Agreement lifts the restriction for carriers of both countries to enter inland for more than 30 km and allows them to carry out door to door delivery. Given the fact that 40 percent of AliExpress Russian consumers are located in the Asian part of the country and the main competitive disadvantage within the Russian market continues to be the delivery duration (about 1-2 weeks). The agreement provides the “Yangtze crocodile”, which is now expanding its territory in ocean, a chance to further deepen its logistic operations and improving its competitiveness.

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