How AliExpress Made a Profit in Russia

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At the end of 2023, two AliExpress legal entities in Russia showed a profit. The company calls the profit "virtual", one of the reasons for its appearance is the forgiveness of debts in the amount of 8.4 billion rubles.

AliExpress's main legal entity in Russia — a joint venture between China's Alibaba Group, Russia's VK, USM, the Russian Direct Investment Fund (RDIF) and its co-investors, Alibaba.com (RU) LLC — reported RUB 10 billion in net profit in 2023 after RUB 11.7 billion in losses the year before, according to the company's RAS report. The company has been unprofitable since at least the creation of the joint venture in 2019.

In addition to this legal mexico whatsapp resource entity, the Singapore holding Aliexpress CIS Holding Pte. Ltd, through which the partners own AliExpress in Russia, includes two more companies in Russia: OOO Aer-Tekhnologicheskie Resheniya and OOO Agregator-s Online. The first showed a profit of 1.9 billion rubles at the end of the year instead of a loss of 1 billion rubles in 2022, the second increased its loss from 1 billion to almost 1.3 billion rubles.


Alibaba.com (RU) said in its 2023 report that the company made a profit mainly from non-core revenues.

A representative of the press service of AliExpress CIS told RBC that the company actually had no profit: "The data of Alibaba.com (RU) for 2023 reflects accounting income, in fact, "virtual profit" formed due to the forgiveness of an internal loan issued in 2021 from another company in the group." According to the reporting, last year the company was forgiven an interest-free loan of 5.94 billion rubles. According to the representative, according to the basic rules of accounting and the principle of double entry, when writing off liabilities, their amount becomes accounting income.

The appearance of profit is related to the procedure for maintaining accounting statements according to Russian Accounting Standards and is not a consequence of improved business performance, agrees Tatyana Otradnova, Head of Financial Expertise at the consulting company NEO. According to her, this is explained by three factors: the forgiveness of an interest-free loan of RUB 6 billion by the Singapore holding, the restoration of reserves for estimated liabilities, and the growth of income from exchange rate differences. "Of the RUB 13 billion in other income, almost RUB 6 billion comes from the forgiveness of an interest-free loan received from a related party, Singapore's Aliexpress CIS Holding Pte. Ltd. In fact, AliExpress did not have more money - the reporting shows that the loan already existed as of December 31, 2021. The company simply lost its obligation to repay the RUB 6 billion debt," Otradnova explains. In addition, the reserve for doubtful debts was restored: it follows from the reporting that in 2022 AliExpress reserved a loan issued to the company "Agregator-s Online" in the amount of more than 2 billion rubles, and in 2023 it was repaid in full. Income from exchange rate differences last year amounted to 4.6 billion rubles, while in 2022 they brought in 1.3 billion rubles. "Perhaps, within the period there were sales or purchases that were tied to exchange rates, and due to exchange rate fluctuations during the year, income from exchange rate differences was formed," explains the representative of NEO.

A representative of AliExpress CIS emphasized that, according to its income tax reporting, the company ended 2023 without a profit. He insists that Alibaba.com (RU) is one of several legal entities managed by the company, and it "does not reflect the financial results of the AliExpress platform both in general and in Russia." The actual loss of Alibaba.com (RU) is indicated in the income tax declaration - it is 2.6 billion rubles, he said.