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Yandex.Market and Sberbank want to create a Russian Amazon. What are the chances of the project

Yandex and Sberbank announced a deal: they create a joint venture on the basis of Yandex.Market, a huge online hypermarket with its warehouses. Now "Market" will stop sending us to the sites of other stores, receiving a commission. Instead, it will start working under the Amazon scheme. The most popular products will be stored at home, and instead of developing foreign resources, all sales transactions will be concluded within the same site. They say such a radical change in the business model is associated with excessive competition from foreign online stores.

The joint project of Sberbank and Yandex is estimated at 60 billion rubles ($ 1 billion). The figure is very impressive: in 2013, before the depreciation of the ruble, Yandex paid $ 80 million for Kinopask, and Durov received $ 300 million for Vkontakte. Besides, Yandex.Market is one of the most Popular resources Runet, with an audience of more than 20 million people a month. But will the new site be able to do the same thing that Amazon did in the US, where it accounts for more than 50% of online purchases?

We at Pochtoy.com with Amazon cooperate very closely, delivering from it the lion's share of your parcels to Russia. And we have serious doubts about the new idea of ​​Grishakov and Gref. Still, Amazon is a very open and independent organization that does what it wants without looking back at anyone. The connection between Yandex and Sberbank (and before that with the Russian Post) makes the service work more stable, but it will prevent it from developing faster than the rest of the market.

On the other hand, Russian online stores are experiencing hard times . Amazon and AliExpress are gaining in popularity. Thanks to the scheme of their work, they can offer the same goods, only one and a half times cheaper. A cardinal change in the work of Yandex.Market under such conditions is perhaps the only correct option …

Background

Sberbank and Yandex already had one joint project – in 2012 the bank bought 75% of the payment system Yandex.Money for $ 60 million. Last year, Yandex.Market was formed as a separate company. Experts then said that this was due to the desire to attract individual investments for the site and accelerate the pace of its development. And the leadership itself said that as part of Yandex, the trade division took decisions too slowly, and so the team will have responsibility and focus on the result.

Then Yandex.Market began to rebuild its work model. If earlier the aggregator took a commission for switching to the sites of other stores, now – only for the purchase they made (2% of the amount). Of the 20 thousand stores, a new payment model was chosen 5 thousand. Maxim Grishakov, head of Yandex.Market, spoke about the idea of ​​turning their site into a huge online store. According to him, due to large volumes, it is possible to start lowering prices, as in Amazon. The company began to look for warehouses in Moscow and the Moscow region where it would be possible to store the stock of the most popular goods.


Maxim Grishakov, the new head of Yandex.Market from May-2017

In January 2017, there were rumors that Sberbank is thinking about creating a joint company with Chinese AliExpress – to "become one of the world's largest e-commerce sites." This strongly disliked Yandex. In the annual report, the company called this potential transaction one of the most serious risks for its business.

In May, Yandex launched beta testing of its voice assistant "Alisa" (whose name even looks like "Alex" from Amazon ). And in July she told that she already developed a smart home column for a year, which should compete with Amazon Echo (and even have a competitive advantage: the ability to respond to Russian speech). David Yang, the founder of ABBYY, commented on this news:

The task of all these devices is to make Internet companies as much as possible in the life of a person. All these additional contacts in one way or another turn into additional money. Even when the user learns through the column the weather for tomorrow, it forms loyalty to the service. "Yandex" is extremely important to occupy the market, until Google or Amazon columns came out here, so as not to lose another big piece, as it happened with smartphones and mobile Internet.

Thanks to a new deal with Sberbank of Russia, Yandex is making the biggest step towards switching to the Amazon model. With almost unlimited finances and an extensive network of offices throughout the country.

What now

After the deal with "Yandex," Sberbank's talks on the creation of a joint venture with AliExpress are likely to be suspended. Still, Sberbank's priority is to invest in the Russian economy, Russian companies.

Vladimir Bespalov, an analyst at VTB Capital, notes in an interview with RBC:

While there is no clear leader in the e-commerce market. As Yandex recently stated, they have a strategy to move towards "Russian Amazon". Now they will have a powerful partner in the person of Sberbank, with whom they can share these risks, including investment risks.

The deal will finally be closed after the investment audit of Yandex.Market and obtaining all necessary permits. This should happen before the end of 2017. Meanwhile, Yandex is moving to a transactional model. Chooses warehouses, builds a logistics and delivery system. Does everything to not go out of the Market: the goods and the way of sending them can be selected on the site itself.

The project manager, Maxim Grishakov, admits that it will be difficult to attract large stores to the new site :

They want the buyer to come only to them, and they reluctantly share traffic. Amazon in America, too, does not work with the largest retailers, because the latter are trying to do something themselves. We will struggle with this, expanding the range of goods. And the technology of the Savings Bank will improve the payment process and offer the purchase of goods on credit.

In addition, experts say, Yandex will be able to use the administrative resource and massive network of Sberbank branches to issue Internet orders or twist advertising. This will be an organic output of the Internet giant in offline retail, which is still the first in popularity in our country. Only with such advancement, "Yandex.Market" has prospects to become the number one, like Amazon in Europe and America. Now this is the third online trading platform in Russia – after Avito and AliExpress, but together with Sberbank it can compete for the first line.

Why "Yandex.Market" does not become Amazon

In 1998, Steven Jobs in an interview with Fortune said: "As a child, the guy from the next street had a Volkswagen Beetle. He dreamed of making him a Porsche. The guy spent all his time and money on the accessories for the car, so that it looked better and sounded more powerful. But, when he finished, he did not have Porsche. It was just a loud ugly Volkswagen Beetle. "

The chances of Yandex.Market to become Porsche are not great. This is a matter of facts and statistics. The new enterprise "Yandex" and "Sberbank" is estimated at 60 billion rubles ($ 1 billion). Amazon costs at least $ 500 billion. When it inevitably leaves for Russia, it will be almost impossible to compete with its prices and its big data. The monthly audience of Yandex.Market is 20 million users, Amazon has a minimum of 150 million (and this is only in America). To lure back an audience that has learned to buy abroad, Yandex will also be extremely difficult: prices in Russia will always be higher than in competitive markets in China and the US, where there are no unnecessary taxes.

But these are the things that Mind. And there are pitfalls. About why borrowed from the business model is not suitable for Russian realities, the head of the agency "InterMonta" Aleksey Bozhin told in details. And we, based on eight years of experience with the "Amazon", added to their reasons a couple of their own:

1. Difficulties of logistics .

Warehouses are known to play a key role in sales volumes. Amazon pays special attention to them: it builds its largest warehouses in the world, populates robots scanning products, specially trains employees, gives them super-tech "guns" that check every sneeze. Realizing that the size and location of the warehouse is the main potential advantage of the online store, Amazon spends a lot of money, hundreds of millions of dollars, trying to develop airship-storage or hive-warehouses, of which delivery would be carried out a little faster.


One of the Amazon warehouses

There will not be enough free space for Yandex.Market, and it is unlikely that the platform will be able to deliver fast bazaar in the first six months or a year. In order not to be an outsider and not lose to small shops scattered in different areas of cities, the company will have to invest millions, and not rubles. Sberbank's money will begin to leave very quickly. This is said by the head of the Association of Internet Trade Companies (ACIT) Alexei Fedorov:

Everyone wants to become an Amazon. But this will require huge investments from Yandex – its warehouses, many items. So, for example, Ozon is already working. He has huge investments in his own logistics infrastructure and so on. And the company is still unprofitable.

2. The need to win the trust of customers

For an online hypermarket, this is just as important as low prices. It is necessary that you like people, that they recommend you to their friends. Live communication with customers, in the opinion of Bojin, is far from the end of Yandex. The company will have to create call centers from the ground up to deal with customer issues and take orders. At "Amazon", for example, 35 000 people work at call centers – five times more than all employees in "Yandex". Logistics, availability of warehouses and training of employees are separate problems. There are two options: either the Market is waiting for a couple of years, prepares the base, and during this time hands over the Russian market of AliExpress with Avito, or it rushes, launches the service next year, and gets a row of negative reviews about the speed and quality of its work.

3. Insufficient innovation

It's not enough to become the best, it's important to consolidate yourself to # 1. Amazon does this by investing in the future. Creates its own robots, shipping drones, stores without cashiers, airships, fleet of 40 aircraft, "hive-warehouses" in the cities. The company is always on the verge, on the horizon. The "Market" does not have so many extra billions to invest in unique new developments, in scientists making scientific breakthroughs. So – it will simply be "another store," although slightly larger or slightly more known than the rest. Go to another league, as did Amazon, he is unlikely to succeed. Sberbank and the Post of Russia, supported by Yandex.Market, have recently shown progress, but still are more associated with our past, and not with our future.


Robots-carriers in the warehouse Amazon

4. Opposition from "partner shops"

"Yandex" will have to fight against their own customers – shops that want to sell goods through their site. Amazon and AliExpress did not encounter this: they never visited the sites of foreign shops, all sales take place on their personal portal.

Now Yandex.Market wants to not just be another traffic channel. He wants to become a hypermarket, where traders will sell their goods. To convince experienced store owners to pass the reins of government into Yandex's hands will be very difficult. Shops with the biggest turnover two years ago, preparing for this scenario, began to reduce their dependence on the site. And from here – the fall in profits and a reduction in the range, which is already observed. People will start looking for other ways to promote their product – SEO, Google, independent aggregators like "Search-Selection" and such classifics as Avito. Already, attendance of Avito is greater than that of Yandex.Market, and in half a year the gap will only increase.

What can we expect

According to the analyst of FC Otkrytie Alexander Vengranovich, the way of attracting financing through Sberbank may indicate that Yandex is not completely sure of the correctness of its strategy in e-commerce:

Perhaps they tried to reduce risks, Divide them with a partner. It is clear that the competition from the Chinese and American electronic trading platforms will increase. Yandex.Market could not stand it. However, the transformation of the service into a similar site, the construction of its logistics is a complex project, the return from it is unclear.

A partnership with Sberbank will give Yandex.Market access to its branch network in Cities, will allow the introduction of instant credit services and will give other advantages. A hypermarket will be able to give such an advertisement offline, which neither Wikimart nor Avito had.

It's unlikely that something will get in the way to becoming the first online store within our country "Market". But it's unlikely to get 50% of the online shopping market – there are too many pitfalls and big internal competitors. And as soon as Amazon decides to enter the Russian market, probably the same story will happen as Facebook vs "Vkontakte" and YouTube vs RuTube.

So far, the question can be looked at from two positions:

1. The glass is full

The deal of Sberbank and "Yandex" can give the market a positive charge. What is missing in Russian online retail is competition. In new realities, stores relying on the "Market" will have to develop, find new ways to attract the user. In the first place, the winner will be the buyer who will vote for the most pleasant ideas to him. And in the future, the "Market" can become as cheap as in the American Amazon (only, of course, with an amendment to Russian taxes and fees).

2. The glass is empty

Sberbank and the "Post of Russia", new friends of "Yandex" in the field of online sales, are known for their propensity to monopolize the market. Thanks to their resources, "Market" can for a couple of years make the main (and, in fact, the only) site for Internet sales. Cases in "Citylink", "Yulmart" and "Eldorado" are, frankly, not very. Competing with the combination of Sberbank + Yandex will be extremely difficult for them. There is a fear that after the introduction of the horse customs fee for parcels with purchases from countries outside the EEA, we will be put in a stall and forced to buy only on the Market. Take and bring parcels from the real "Amazon" and other foreign stores will become much more difficult, but there will be no competition inside.
Which option seems more likely?

While the Russian "Amazon" is trying to take off, you can buy on a real Amazon – the prices for clothes and electronics will always be much cheaper than in Russia. And you can deliver all foreign packages with Pochtoy.com. Register with this link and enter the GEEKTIMES code to get $ 7 to your account. Ordering directly from the US – in fact, is not much more complicated than taking yourself to something on the "Yandex.Market."

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