Royal Battle of Russian E-Commerce, Tiktok intrigues in the USA and the sad final of Libra

The topic of release is the battle for the Russian online trade market

Ozon is on the top of the NASDAQ and the Mosbirzh. But the most interesting thing in the Russian online retail is just beginning. Competition intensifies, and attracting new customers is becoming increasingly difficult - even to leaders. We figured out which of the players - Ozon, Wildberries, Yandex, Mail.ru Group or, perhaps, “Sber” - more chances to win in the beginning royal battle.

What is the success of Ozon on the stock exchange

Ozon capitalization after an IPO, taking into account all loans and options, exceeded $ 7 billion. This is a deafening success. The company initially set the price of placement above the upper limit, and immediately after the start of trading, the price took off by another 40%. The book of applications was re -signed by more than ten times, writes Forbes. As a result, the oldest Russian online retailer will be able to invest in the development of almost $ 1 billion.

Would OZON have such a successful IPO, if not for the pandemic? Not a fact. More recently, according to our information , the sale of business Sberbank was discussed. Before placing the company, I had to pay the State Bank 1 billion rubles of compensation.

It is interesting that the IPO of the Russian Amazon (as Ozon called American business publications) caused a greater excitement not in Russia, but abroad, two interlocutors of The Bell in investment banks noted. Many Russian funds showed caution - there are serious questions for the OZON business economy. Their foreign colleagues were led by the desire to make money on the Russian E-commerce: there is a promising niche, and there is no other opportunity to invest in it.

Russia is the largest market for Internet users in Europe: about 100 million E-Commerce in Russia, according to the Data Insight agency, in 2019 grew by 23% to $ 31 billion. This is approximately like in India (population-1.3 billion people) and a little less than in Canada, pays attention to The Wall Street Journal. According to the results of the coronavirus 2020, the growth, according to the forecast of the same Data Insight, will be 44%. In 2021–2024, the market will grow by an average of 33.2% per year.

It is not surprising that after the success of Ozon, the X5 Retail Group thought about IPO, which during the pandemic became one of the leaders in Fudtech. In the next two or three years, retailer may well allocate online projects in a separate business and bring it to the exchange, they said in the group. The desired assessment is $ 3 billion.

And if Wildberries gathered in the exchange, the leader of the Russian E-Commerce, his assessment could be at all $ 10 billion, Forbes believes . Before the IPO Ozon, the publication estimated the company at only $ 1.4 billion.

What are the new shareholders Ozon awaiting

In the summer of 2019, OZON General Director Alexander Shulgin said that the company may think about an IPO in two years, if he “increases its share in the Russian electronic commerce market, accelerate sales growth and improve infrastructure”. But it seemed to be impossible to come up with a better moment than now. Lokdown spurred the growth of E-Commerce, and Ozon used this fully: in 2019, his revenue amounted to 60.9 billion rubles, in nine months of 2020-66 billion.

The growth potential in the Russian E-Commerce is far from exhausted, the top manager of one of the marketplaces, who talked with The Bell, is sure. First of all, at the expense of offline: “Now hybrid models are increasingly widespread: to pick up the goods from the store, to deliver to the store ... Therefore, competition will not be at the expense of online sites, but due to who can configure these processes best.”

At the same time, Ozon has already remained deeply unprofitable for 20 years (the company -pioneer company): in the first three quarters of 2020, its net loss amounted to 12.9 billion. And in the near future this will not change, OZON investors in the Avenue of Amyssia warned . The revenue will continue to grow, but the company intends to invest all the money received in an increase in sales, logistics and new services.

In fact, for the growing online retailer, it is not so scary-it is not so scary, experts and analysts argue: the same Amazon did not bring profit for ten years, reinvesting everything earned in an increase in the market share. “Russian Amazon” seems to do the same, but comparing it with the real Amazon is still not wrong.

Amazon is a global company, a factual monopolist in most markets. Ozon is firmly locked inside the competitive Russian market. In Russia, the three E-Commerce leaders make only 18% of sales. For comparison, Amazon controls almost 40% of the native market. At the same time, in 2019, according to Data Insight, Ozon took only the third place after Wildberries and the “Citillin” - with a separation from the leader more than two and a half times.

Investors hope that $ 1 billion attracted on the exchange will help Ozon accelerate. “I think Ozon received an assessment with an advance - now everyone will look at the results of the first half of the year,” the head of another marketplace argues in a conversation with The Bell. “If Ozon does not show that he is leading to leadership, the company may have real problems with capitalization.”

IPO is a race with unequal conditions: everyone wants to buy and no one wants to sell, says Igor Danilenko, managing director of Fosun Eurasia Capital: “For Russia, it is unusual to show such growth on the first day. At the “Sovcomflot”, for example, shares on the first day of trading were 12%. But in the West it is a common thing. As, however, that 80% of the papers in six months are lower than the accommodation price. ”

With whom Ozon competes for leadership

The main competitor Ozon is Wildberries. For nine months of 2020, the turnover (GMV-GROSS Merchandise Volume), the most important indicator in the online retail, amounted to 121 billion rubles. In Wildberries, the turnover in only one third quarter exceeded 100 billion, and in nine months amounted to 285 billion.

In addition, the Russian market has a large foreign player - Chinese AliExpress, which, however, does not disclose the indicators on the turnover. The Yandex.Market is gaining move (ex-“take”), which after the divorce of Yandex and Sberbank works as a platform for comparing prices and as a marketplace.

Sberbank dreams of her own marketplace. According to The Bell, his new partner in E-Commerce can be the M. Video-Eldorado group, which develops the Goodplais Goods.ru.

The M. Video-Eldorado itself and its competitor “Citylink” are large Internet trading people. At the first online in the first nine months of 2020, 57 % of the total sales, or 194 billion rubles. This is more than Ozon. "Citylink" has not yet reported on the results.

Niche players feel good - like Lamoda, which also develops as a marketplace. The company's turnover in the first nine months of 2020 amounted to 39 billion rubles.

And there are still more and more competitors in the market: among them, Ozon in the Avenue of the emission calls not only multidisciplinary marketplaces, but also offline retailers. For example, the same X5 Retail Group, referring to Infoline data, recently proclaimed itself a leader in the online food segment. The turnover of online sites of the group amounted to, however, only 12.7 billion rubles, but the growth potential of this business is large, all experts surveyed by The Bell admit.

“Some current or potential competitors may have more resources and experience in management, technology, finance, products, sales, marketing and other areas,” Ozon warns its investors.

What's next

All Russian marketplaces can be divided into two groups: independent projects (Wildberries and Ozon) and elements of ecosystems (Yandex.Market, SP Mail.ru Group and AliExpress, the future marketplace of Sberbank).

“If the ecosystems manage to bring more traffic to their sites, Ozon and Wildberries will be in a difficult position,” the top manager of one of the marketplaces argues in a conversation with The Bell. - But personally, I believe less in the success of [Russian] aliexpress and Yandex.Market, because it is purely online stories. Ozon and Wildberries with their issues of issuing orders look more convincing. "

“In order to develop this business, infrastructure, logistics, quality control, return are needed, and Yandex is not able to,” says Fosun Eurasia Capital Igor Danilenko. “Yes, they can invest in it, but this will require very large money that management can decide to another.”

But for two or three years, all participants in the race should have enough ambitions and money, according to the top manager of one of the marketplaces. “The more fiercely it [the battle] will be, the more it will be more expensive to attract new and retaining old users,” continues The Bell's interlocutor. “Who will learn to do this cheaper (due to loyalty programs or ecosystem bonuses), he will eat most of the pie.”

“He who now ceases to grow actively will lose immediately, because his competitors will definitely continue,” explains Igor Danilenko. -In the next two to three years, we will see who will be in the market No. 1, who-No. 2. More than three large participants will be unlikely to remain. Here [as a marketplace] you can earn only if you are No. 1 or No. 2. Like mobile operators: if you have a 30% market - you earn, if 10% - no. ”

“When the competition is aggravated, the marketplaces will have to reduce the commissions for sellers, offer them different advantages: cheaper delivery, the best service,” Igor Danilenko predicts. The OZON public company, according to the expert, will have a small advantage over Wildberries: access to cheap money. “This is exactly what Amazon uses: the zero cost of capital allowed him to build his own logistics in five years when no one was expecting it from him,” he concludes.

Tiktok

How ByTedance hired ticklers for vessels with the US authorities

Donald Trump put the Chinese ByTedance before a difficult choice: to sell the American business Tiktok or leave the market. The company tried to defend itself in different ways. One of the most effective was the trials against the administration of the departing president of the United States. One lawsuit was filed by the company itself, the other - popular tickcers who risk being left without subscribers and, accordingly, income. It looked like bloggers acted on their own initiative. But The Wall Street Journal found out that they were a Chinese company. And the trick worked: the court suspended the decision to block the application in the United States from November 12, which gave the company time to continue negotiations on the sale of the shares of Oracle and Walmart. In addition, the US Trading US Trade with reference to this lawsuit refused to hardly block the service. However, BYTEDANCE will still have to start the American partners: the new American president Joe Biden is unlikely to cancel this decision, although so far it has not yet been publicly spoke out on this score. The transaction should be concluded until December 4.

Libra

Facebook will launch Libra in a very cut -out form

Many Facebook cryptocurrency have already buried, but the IT giant itself did not refuse to launch Libra. This may happen in early 2021, writes The Financial Times. The solution depends on the date of approval of the project by the Swiss regulator. It is expected that he will do it in January. Initially, Facebook wanted to make Libra the basis of its global payment system: cryptocurrency was supposed to be provided with a whole basket of different currencies. Facebook hoped to launch cryptocurrency in the first half of 2020. Unfortunately, little is left of these grandiose plans. Problems with regulators that saw in Libra a threat to traditional currencies, a channel of laundering and leakage of personal data could not be decided. As a result, Facebook partners - first PayPal, and then Visa, MasterCard and Ebay, refused to cooperate with the project. As a result, Facebook will release only a token tied to the dollar. It will be available only to users from the USA and Latin America.

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