Business / Top Biz News

Alibaba payment company forms alliance with Russia's VTB bank

By Cecily Liu (China Daily Europe) Updated: 2016-01-22 19:16

Russia's leading bank, VTB is now the foreign exchange provider for e-commerce transactions carried out in Russia on the Alibaba business-to-consumer website The strategic partnership between the two parties was signed on Thursday during the World Economic Forum in Davos.

Riccardo Orcel, deputy CEO of VTB Group, said that VTB formed a strategic alliance with Ant Financial Services Group for the Russian market, and both companies will work closely on payment and banking services in Russia, to provide a comprehensive and reliable shopping experience for Russian consumers. However, there are more potential opportunities in emerging economies for cooperation in the future between the two companies. 

The ceremony was attended by VTB Group President and Chairman Andrey Kostin, Founder and Executive Chairman of Alibaba Group, Jack Ma and Chief Executive Officer of Ant Financial Services Group, Lucy Peng. Ant Financial is a New York Stock Exchange listed company, and was founded as the financial service provider of Alibaba.

"Alibaba is not just an e-commerce company, they have impressive financial services technology that they are already deploying, with recent investments in The Post Office of Singapore for example. And they are of course a leader in e-commerce, supported by their significant logistics network that delivers products to their growing client base," Orcel said. 

Orcel explained that it is not only through competitive pricing that e-commerce gaining ground against competitors, but also through providing a high quality, broad product base and ensuring reliable and speedy delivery. Alibaba has a demonstrated track record and this is ensuring quick success in Russia.

VTB is partnering with China's largest e-commerce company and the landmark agreement will help to ensure that Ant Financial's and Alibaba's business potential is maximized by providing best price of the transactions, settlement services and best choice of financial instruments.

Orcel said he is impressed with Alibaba's growth in Russia through its business-to-consumer platform

Although the platform is only two years old in Russia, it is one of the fastest growing e-commerce platforms in the country, and ranks around seventh in terms of the number of website visitors.

"Alibaba is number one in the world, and Russian consumers will benefit from the company's growth plans in the country. E-commerce continues to grow and this is a secular trend that goes beyond economic cycles,”
Orcel said.

His team is also looking for opportunities to work with Ant Financial in other countries, using VTB's international operations and experience to help Ant Financial with commercial, corporate and investment banking services.

VTB Group's investment banking operations for China operate from Hong Kong, and the bank has a fully licensed branch in Shanghai. It is the only Russian bank on the Chinese mainland and represents a priority for VTB's international growth plans.

Orcel said, he believes Russia-China trade and investment relationships have great potential to grow, and VTB hopes to play a significant role in financing these opportunities.

He said key sectors for cooperation include energy, power, and infrastructure, where Chinese investors are keen to invest in Russian projects with good returns. Russian companies are turning towards Chinese products in several sectors including for example technology and telephone equipment provided by global leaders in the sector such as Huawei.

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