RUSSIA: Chinese e-commerce giant Alibaba and Russian technology group Mail.ru said on Tuesday they would launch a joint e-commerce venture in Russia and former Soviet countries.

The deal comes as e-commerce is developing rapidly in Russia though hindered by the country’s vast size and problematic infrastructure, including an often unreliable postal service.

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The two groups, along with the Russian sovereign wealth fund RDIF and telecom operator MegaFon, announced the creation of a “strategic partnership” as Russia hosts an economic forum in the far eastern city of Vladivostok.

Alibaba and Mail.ru said in a statement that the partnership will “launch a leading social commerce joint venture in Russia and the CIS (Commonwealth of Independent States).”

The new company will be called AliExpress Russia based on the name of an existing Alibaba platform.

It will be 48% owned by Alibaba, 24% by MegaFon, 15% by Mail.ru and 13% by the RDIF, the statement said, without disclosing any valuations involved.

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Russia’s RBK media group reported that the RDIF would invest up to $300 million. The deal involves MegaFon selling Alibaba its 10% stake in Mail.ru.

Alibaba, co-founded by tech billionaire Jack Ma in 1999, reported revenues of $39.9 billion for the year ending March.

It already plays a major role in e-commerce in Russia through its AliExpress and Tmall platforms.

Ma announced Monday that he will step down as head of Alibaba in a year’s time.