Alibaba's joint venture with Russia's Mail.Ru will start the integration process for AliExpress and VK systems within the next few months, a new report confirmed. The collaboration is looking to leverage on the Russian social media giant's various segments for e-commerce, online gaming, and communications opportunities.
CEO of Mail.Ru Group Boris Dobrodeev said that the collaboration will help "promote the development of the digital economy." He added that the venture will provide businesses with a platform through which they can grow and be known globally.
"AliExpress Russia JV will become an undisputed leader in Russian e-commerce and create an unparalleled social commerce offering for our users," Dobrodeev noted of the soon-to-commence operations.
Details about the project were revealed over the weekend, following Chinese President Xi Jinping's visit to the Kremlin that enhanced bilateral trade and strengthened ties between the two countries.
Both Alibaba and Mail.Ru pledged to exert equal efforts in ensuring that the venture's goals of providing an effective social media and e-commerce platform for Russian users will be executed as initially agreed on.
As part of the joint project, the Chinese e-commerce behemoth will invest $100 million while Mail.Ru will also invest $182 million. The latter amount will be invested for a 15 percent stake in the project.
Shareholder MegFon exchanges a 24.3 percent stake in the project called AliExpress Russia JV for 9.97 percent of economic stakes in Mail.Ru Group. The agreements were signed in efforts to build up global e-commerce partnerships.
A Nasdaq report noted that the new deal between two of China and Russia's leading tech companies makes for an improved stock value on the side of Alibaba, especially at this point wherein the China-U.S. trade war is on.
Alibaba CEO Daniel Zhang said that the partnership will combine social media and e-commerce to provide consumers and entrepreneurs with improved purchasing and browsing experiences.
Industry analysts pointed out that while both Chinese and Russian markets come with challenges for companies forging partnerships, an alliance between the two giant firms could further propel Alibaba and even Mail.Ru to greater heights both in revenue and in stock support.
The deal that was first initiated last year will not only benefit Chinese and Russian consumers and businesspeople. The partnership will also cater to neighboring countries interested in leveraging on the project.
An exact date of integration between AliExpress and Mail.Ru's VK systems has yet to be announced but analysts are expecting developments to be revealed within a few months time.
Alibaba and Mail.Ru stocks are expected to see a hike as more details about the project are revealed to the masses.
