AliExpress Russia said to be laying off employees amid risks of secondary sanctions

  • AliExpress Russia, the e-commerce joint venture between Alibaba Group Holding and three Russian partners, is cutting jobs, Vedomosti reported
  • Some Chinese tech companies have scaled back operations in Russia and Ukraine, as Western governments impose sanctions against Moscow

AliExpress Russia, the e-commerce joint venture between Alibaba Group Holding and three Russian partners, including Mail.ru Group, has begun a wave of lay-offs, according to a Russian news report, as Chinese tech companies scale back their operations in the country after the invasion of Ukraine.

The job cuts, which started a month ago, affect up to 40 per cent of employees working on business lines that have become expendable amid Western sanctions on Russia, according to Vedomosti, citing an anonymous source.

The newspaper said it interviewed three people for the report, including two people familiar with the situation in the e-commerce market, as well as an employee who was laid off.

AliExpress Russia did not respond to a request for comment sent via email on Thursday. Alibaba owns the South China Morning Post.

Deng Jinling, a Chinese merchant who lives in the eastern export hub of Yiwu, said she has received almost no orders from Russia and Ukraine in recent months.

The markets used to contribute around 60 per cent of her vacuum flask business, with an annual turnover of around 20 million yuan (US$2.9 million), she said.

Normally, she would negotiate prices with clients after Lunar New Year, and deliver orders by May. “But we still don’t have any orders now,” she said.

“We have no idea what the situation will be in the second half of the year. Russia and Ukraine haven’t reached an agreement. The Russian ruble rose slightly earlier, but the situation is not ideal.”

AliExpress Russia said in April last year that an initial public offering was a possible next step for the company, which reported US$3 billion in gross merchandise volume – the total amount of transactions at its online marketplaces – for the financial year of 2020 to 2021, according to a Reuters report.

The ongoing military tensions between Russia and Ukraine have dealt a huge blow to Chinese companies selling to the region.

Freight shipments from Shenzhen to Russia have shrunk by nearly a third since the invasion began, freight forwarders in the southern tech hub said last month.

Huawei Technologies Co, a Chinese telecoms equipment giant, has reportedly laid off some local staff in Russia to manage the risks of secondary sanctions, although the company has neither confirmed nor denied the report.

DJI, China’s top drone maker, announced last month it would suspend sales to both Russia and Ukraine after allegations that its products were being used for military purposes.

Chinese technology companies have generally refrained from commenting on their Russian businesses or the situation in Ukraine, partly because Beijing officially opposes sanctions against Moscow.

In March, Chinese ride-hailing giant Didi Global, which has been under a cybersecurity investigation in China since last summer, back-pedalled on its decision in late February to cease operations in Russia.

Author: Tracy Qu, SCMP

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