Part II - Full Stack e-commerce, Chinese Deployment, Logistics and Profitability

The Trump administration is counting on China folding in its trade kerfuffle with China. China won’t fold because the Chinese are successfully deploying e-commerce services in Southeast Asia and now - in Russia. 

Amazon and Facebook

Amazon faces fierce competition in a full stack deployment of e-commerce and logistics that is changing Russia and the globe. 

Alibaba, China’s e-commerce juggernaught is now scaling through Russia, a substantial market where AliExpress and AliPay face no competition from either Amazon, Facebook or any other American social media-related or e-commerce services. 

Financial Times: “Russia’s $18bn ecommerce market - $5.4bn of which is cross-border trade - only accounts for 4 percent of retail sales even though it grew 21 percent year-on-year, according to market research firm Data Insight.” 

e-commerce, Cross-Border Trade, Logistics and Profitability

e-commerce has revised both Russian logistics and the profitability of Russia’s struggling mail service: 

Logistics

Vladivostok has become a logistical entrepôt for shipping of mostly Chinese goods to the Urals and Siberia, which account for 40% of AliExpress’s online sales. Goods are now delivered to destination in 14 instead of 40 days. This will not impress Amazon Prime customers who expect same or next day delivery, but for Russia and China, this improvement in logistics is a big deal. 

Profitability

Pochta Russii, the Russian mail system, made a record Rubles 2.7 billion profit in 2018, 350 percent more than in 2017, according to the Financial Times’ Russian sources. In comparison, the U.S. postal system is debt-riddled and at last look, had $34 billion in unfunded pension liabilities. 

Deployment of the Full Stack

Full stack e-commerce in tech lingo, includes social media, marketing, advertising, exchange (purchase and sale), returns, payment and Fast Logistics. 

e-commerce, Rusia, Logistics; Joint Venturing

The huge cross-border trade between Russia and China last year saw the delivery of 290 million packages, 90% of which came from China. Now Mail.ru, part of Russia’s largest social network VK- the mobile operator Megafon and Alibaba are joint venturing to develop online shopping in Russia. A payment system that combines AliPay with Mail.ru’s technology is in the works for this year. State run Sberbank has created a competing joint venture with Mail.ru’s rival Yandex, and is backing with $1 billion this union of retail and payments. AliExpress handles the lion’s share of cross-border trade with 20 million Russian users sourcing from China and so Sverbank and Yandex have decided to deal with Western markets in view of AliExpress’s commanding lead in trade with China. Yandex.Market’s new venture, Bringly, will concentrate on trading Western goods. 

Global Trade Kerfuffles, Logistics and Profitability 

Full stack e-commerce deployment has become the most formidable economic development force. An economically rising and well-educated Russian middle class, e-commerce, faster logistics and payments are transforming Russia and SE Asia.

Because of e-commerce and fast logistics, such legacy services as postal services, have become profitable. 

Africa and South America are next. 

Part III - Full-Stack e-commerce and Economic Transformation