Blog Post

Shoptime’s $50m heats up Russia’s e-commerce war

It’s been a big week for Russian web companies, with search engine Yandex hitting Nasdaq and billionaire investor Yuri Milner stepping down from his role at But perhaps both of those have been topped by the news is about to receive a bumper $50 million investment from rival KupiVIP, according to reports in the local media.

Business daily Kommersant reported a few days ago that KupiVIP — a flash sales site with backing from Mangrove, Accel, Balderton and Bessemer — wants to help Shoptime expand, with the aim of becoming the country’s biggest player in online retail.

“The fashion segment has grown by more than 50 percent each year,” it quotes Kupi CEO Oskar Hartmann as saying. “in three years this market will exceed $4 billion, and we want to be a leader in this area.”

Today East West Digital News, meanwhile, says Hartmann believes Shoptime can reach 500,000 users by the end of 2012 and overtake KupiVIP’s base of 8 million by 2015.

It’s not entirely clear whether this is a straight buyout, or merely an investment from KupiVIP — which itself raised $55 million last year. But what is certain is that the e-commerce wars in Russia are really starting to kick off with a series of major investments and consolidation.

Russia is now Europe’s biggest internet market, but only a small portion of the population are regular web users.

That has driven lots of speculation over the prospects of growth, and last year market leader scored a massive $100 million round of funding to help it scale up and become the local equivalent of Amazon. It promptly went and purchased shoe site Sapato.

Other players are there too, but it seems as if they may begin rolling up — not least because there is a heavy level of investment needed by companies to actually build the physical infrastructure for delivering products they sell.