Image source @ Visual China
Text | Chopped pepper TMT, the author | wonderful
Russia's conflict with Ukraine entered its fifth day, after a number of countries and regions such as the United States and the European Union announced that they would impose economic sanctions on Russia, and the focus of the outside world began to extend from war to the economy.
As an important economic partner of Russia, many people speculate that under the sanctions and war, the business of Chinese companies in Eastern Europe is bound to be affected.
For example, AliExpress, which accounts for the largest proportion of Ali's cross-border e-commerce business, can the IPO that was originally scheduled to be held this year still be carried out as scheduled? Can Haier, which has spent 20 years and won the runner-up in the home appliance industry in Russia, maintain its good results? Will Haier's multiple plants in Russia be affected? How will The popular Chinese mobile phone manufacturers in Russia and Uzbekistan rearrange?
In addition, on February 21, when the friction between Russia and Ukraine just started, Russian media reported that Irina Guschina, Didi's public relations director in Russia and the CIS, said that the company would stop operating in Russia and Kazakhstan from March 4 this year. However, on the 26th, Didi said on Weibo: "Didi Chuxing's local business in Russia will not be closed, and it will continue to operate in Russia in the future and continue to serve drivers and passengers." ”
In fact, Since Didi entered the Russian market in August 2020, it has been in a state of loss, and under the influence of the war, the future survival will be more difficult.
Can AliExpress russia still be able to IPO this year?
On February 26, the United States, together with the European Union, the United Kingdom, and Canada, issued a joint statement announcing a ban on Russia's use of the Global Interbank Financial Telecommunications Association (SWIFT) International Settlement System.
SWIFT is mainly used for information flow, which is colloquially a system for transmitting "financial messages" and is currently used by more than 11,000 banking institutions, securities institutions, market infrastructure and corporate customers in more than 200 countries and regions around the world. Therefore, after Russia was kicked out, it immediately shocked the economic circle, and some even called it a "financial nuclear bomb".
Some experts said in the interview that the core impact of Russia's SWIFT sanctions is cross-border e-commerce platforms and third-party collection platforms, etc. For the risks faced by cross-border sellers at present, one is the fluctuation of exchange rates, and the other is that the settlement of cross-border e-commerce platforms will be delayed or risky.
According to foreign media reports, the ruble exchange rate plummeted by nearly 26 percent today, and the first to bear the brunt of the impact is cross-border e-commerce.
As one of the largest e-commerce companies, Alibaba has built a cross-border e-commerce platform AliExpress for the international market since 2010. In September 2018, Ma and Russian state-owned funds, Mail.Ru and MegaFon announced the establishment of a joint venture company "AliExpress Russia" (hereinafter referred to as "AliExpress Russia"), and the following year, landed on VKontakte, Russia's largest social network.
Today, AliExpress Russia has become Ali's largest market for AliExpress, with a turnover of 306 billion rubles ($4.2 billion) in 2021, an increase of 46% year-on-year. The total number of sellers reached 400,000, an increase of 69% in 2021. Among them, the number of Russian sellers increased by 193% to 10. 250,000.
In terms of logistics, AliExpress already has 20,000 express delivery points, as well as multiple overseas warehouses. Liu Wei, head of AliExpress's Russian national station, has said that AliExpress's investment in the Russian market in 2021 may exceed the sum of the investment in the past 5 years.
It can be seen that Ali has spent a lot of effort on AliExpress Russia, and in September last year, Tatiana Volochkovich, director of investor relations at Mail.ruGroup, also announced in a webinar that AliExpress Russia may have an IPO in 2022.
Now that the war is together, it is bound to have a huge impact on the business of AliExpress Russia, not only this year's IPO may be affected, Ali's expectation of 2023 Russian AliExpress GMV to reach $10 billion or difficult to achieve.
On February 16, TikTok's manager in charge of liaison with government agencies in Eastern Europe just announced that TikTok had begun the process of setting up a local branch in Russia according to Russia's "landing law".
TikTok has a high market share in Russia, and App Annie's data shows that TikTok ranks first in Russia in 2021 in terms of downloads, and Russians spend 26 hours and 18 minutes a month on TikTok.
Russia's international news agency was previously told by TikTok of "repeated violations of community guidelines" and permanently suspended upload permissions. Although the ban was subsequently lifted, it became clear that how to deal with complex issues of international relations became a whole new challenge for TikTok.
02 After the Russian-Ukrainian war, are domestic mobile phones still popular in Eastern Europe?
In addition to Internet companies, many mobile phone companies have not escaped the impact of the war.
Feb. 24, the day Redmi Note 11 was supposed to host a local launch in Ukraine, was cancelled as the Kiev explosion sounded.
Why did Xiaomi's launch event choose to be held in a small country like Ukraine?
Xiaomi entered the Ukrainian market in 2016, and in a country where the GDP of this person is only more than 3,000 US dollars, the cost-effective millet has quickly become the most favorite mobile phone brand of Ukrainians.
Canalys data shows that in the fourth quarter of 2018, Xiaomi's mobile phone market share in Ukraine reached 26.7%, winning the Ukrainian smartphone sales championship, and since then, sales have also been in the forefront.
In fact, in Eastern Europe, domestic mobile phone brands have always been recognized.
Canalys shows that according to the sales record in the second quarter of 2021, the most popular mobile phone brands among Ukrainian consumers are: Xiaomi, Samsung, Transsion (Transsion Holdings), OPPO, Apple, and domestic brands occupy two seats.
The same is true of Russia, where both Honor and Xiaomi have become the most popular smartphone brands in Russia.
In the war from citizens to refugee Ukrainian people, for a long time to come, the first problem is to solve the problem of food and clothing, and domestic mobile phone brands may be hit hard in Eastern Europe.
In addition to mobile phones, Huawei has an important business in Ukraine - network construction.
Since 2000, Huawei has strengthened its presence in Ukraine, which has played a vital role in the development of 2G and 3G networks in Ukraine, providing low-cost, high-quality software and equipment.
Over the past few years, Huawei has helped Ukraine increase its mobile broadband penetration rate from 8% to 65%, and more than half of the ukrainian operator's equipment is produced by Huawei, and Huawei has become one of the three largest suppliers of mobile operators in Ukraine.
In 2019, Huawei also won the bid for the construction of a 4G network for the Kiev Metro in the Ukrainian capital, the largest metro communication project in Central and Eastern Europe and Scandinavia.
However, in 2020, Ukrainian media reported that US Deputy Secretary of State Keith Krach told the media that the Ukrainian Foreign Ministry is currently planning to dismantle all Chinese Huawei equipment installed in the Foreign Ministry building. Following the demolition of the Building of the Ministry of Foreign Affairs of Ukraine, other Ukrainian government agencies will also be demolished.
In the war, Huawei's efforts over the past years may be ruined, and in the future, it is impossible to know whether Ukraine, which "abandoned" Huawei, will choose Huawei to rebuild the network.
03 Can Haier continue the myth of counterattack?
In this war, nothing has been hit the hardest by the real enterprise. A number of Chinese listed companies with operations in Russia have recently plummeted all the way, and investors have panicked and asked companies on the investor question platform.
After a continuous decline in shares of CCCC, which has projects under construction in Russia, today it said that the company has a small number of projects under construction in Russia, accounting for 0.0008% of the company's outstanding contracts in mid-2021, which has less impact on the company as a whole.
In addition, a number of Chinese companies such as Longyuan Power, Goldwind Technology, Taisheng Wind Energy, Linyang Energy, China Power Construction, and Great Wall Motor also responded quickly to the impact of the war on the company's business, and most of the companies said that there was no impact or less impact.
However, Bakken Energy was not so lucky, and this afternoon, Bakken Energy announced that the drilling project of Bakken Energy Ukraine Co., Ltd., a wholly-owned subsidiary of the company, was temporarily suspended from February 26, 2022. When normal construction will resume cannot be predicted for the time being, and it is expected to adversely affect the progress and operation of the project.
According to the financial report, in 2020, Bakken Energy's revenue in Ukraine accounted for 23.79% of the main business income. According to the 2021 semi-annual report, 35.81% of Bakken Energy's operating income comes from the Ukrainian region.
The stock market of the electrical appliance market is also a green sea, and Eastern Europe is an important export area of China's electrical appliances, especially Russia, as the largest country in Eastern Europe, and the largest market for Eastern European electrical appliances.
However, under the economic sanctions imposed on Russia by Countries such as Europe and the United States, it is not only a great test for the Russian economy, but also a difficult challenge for Chinese companies doing business in Russia.