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Why Alibaba Is Teaming Up with Mail.Ru

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Alibaba launches a joint venture with a Russian Internet giant

Alibaba (BABA) is looking to expand its horizons beyond China. The company has already made a number of strategic investments in Asian companies. Alibaba is taking a page out of Softbank’s playbook by investing in startups. The company backs leading Indian digital wallet PayTM, among other companies.

The Chinese tech giant has launched a joint venture with Mail.Ru Group, one of Russia’s biggest tech players.

The Russian company claims that it reaches a whopping 90% of the country’s Internet users per month. Mail.Ru offers a number of Internet services, including email, social media, and food delivery.

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Why the deal could be a win-win

The two companies have teamed up to launch a joint venture called AliExpress Russia, which is expected to be a one-stop shop for Internet services. Alibaba will own 48% of the venture.

Alibaba could be planning to marry the Russian company’s consumer services with those of AliExpress, its e-commerce marketplace. Russians could then purchase products from AliExpress merchants in China, while Russian merchants could access newer markets.

Russia is an underpenetrated e-commerce market, and with Internet and smartphones becoming better and increasingly cheap, Alibaba doesn’t want to miss out.

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