Bundle me harder

Misha Falcon
23 min readOct 9, 2018


Do you know that 5 Internet ecosystems launched subscription based bundles? Have you spotted launch of bundles by Alibaba and Yandex this summer?

Have you thought about why the biggest companies in the world are launching bundles, how they price them and what goals are they trying to accomplish?

Did you think about how your business will remain competitive with the bundle product proposition by the largest ecosystems?

Have you considered that the definition of monopoly might be outdated?

Do you know why some internet ecosystems are investing in payments and obtaining banking licenses?

How do you foresee global consumption of media, entertainment, mobility, food and goods in the coming 3, 5, 10 years? Why is there so much buzz about AI and how does it affect you?

Are you ready to buy your lifetime subscription? :)

This report provides some analysis and perspective on the above mentioned questions and some others. It can be a really good food for thought for everyone who doesn’t want to get left behind. We tried to make it informative, thought provoking and yes, it contains amazing illustrations. Enjoy and share!

Disclaimer: The information provided in this article is for informational purposes only, the reader shall not interpret any of the material included herein as any financial, investment, trading, hedging, legal, tax, accounting or any other type of advice. No warranty, express or implied, is made in this article. Information has been obtained from sources believed to be reliable, but no guarantee is made in relation to its completeness or accuracy. Opinions and estimates constitute our judgment as of the date of this material and are subject to change. All opinions and recommendations herein do not take into account individual circumstances, objectives, or needs. Past performance is not indicative of future results, and it is neither required nor intended to update the information set out herein. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The reader must make its own independent decisions regarding any securities or financial instruments provided by the companies mentioned herein and is encouraged, in all cases, to consult with professional advisors.

Copyright 2018 Misha Sokolov. All rights reserved. Unless otherwise agreed by us in advance (please see contacts at the end of the report), any reference to this article must contain the name of the publishers and the authors. This article or any portion thereof may not be reprinted or sold without our consent.


In a global world that is witnessing ever-accelerating technological progress, the definition of competition and monopoly is changing faster than we can comprehend. When a company can control the search habits of billions of people or influence the attention of a global audience, that company possesses the power far greater than that possessed by the classic oil and steel monopolies. We are on the cusp of changes to the legal definition of the term “monopoly” with Google in Europe setting a new precedent. In addition, we are witnessing the rise of another type of competition — the one between ecosystems. Several companies across the world (Amazon in the USA, Europe and Australia, Alibaba Group in China, Yandex in Russia, Yahoo! Japan in Japan, Rakuten in Europe) have united multiple products that can satisfy a large share of consumer needs into one sustainable offer. In other words, these companies have started to bundle product offerings where you pay a fixed sum for a subscription and in return, gain access to several services and products from the ecosystem, as well as other perks (cashbacks, discounts, etc.). This raises some big questions:

  • Is bundling strategy the next major step for all big IT ecosystems?
  • How will this affect competition with single-vertical companies?

In this research paper we will take a closer look at this “bundle” strategy by evaluating the bundles from a consumer and business perspective, finding the rule of thumb for pricing such offers and sharing our thoughts on the competition between single-vertical companies with bundles offered by internet ecosystems.

Converging and colliding Galaxies: banks, telecoms, internet giants and black holes are rising to dominate global and regional consumption:

Illustration by Philipp Nekhaev. Idea and concept by Misha Sokolov

What is an ecosystem?

An ecosystem is a number of products and services in non-coinciding verticals (mobility, bank, e-commerce, video and music streaming, etc.) united by one company or major investor that can benefit from the network effect of each other — due to smart upsell, user base, data, technology, brand awareness or something else.

With technological progress, ecosystems are playing an increasingly important role in the economic arena, even outweighing classical industries. The sum of the capitalizations of the top ecosystems (Apple, Google, Amazon, Alibaba, Tencent, Yahoo Japan!, Rakuten Mail.Ru and Yandex) is three times higher than the sum of the capitalizations of the top-10 Oil & Gas giants (in billions of USD):

The graph is in billion USD. The IT companies’ capitalization is the sum of capitalizations of Apple, Google, Amazon, Yandex, Mail.Ru, Alibaba, Tencent, Yahoo! Japan and Rakuten. Oil companies’ capitalization includes the capitalization of top-10 oil companies.

Big technological companies develop and acquire a wide range of services and products that lay down the foundation for creating a bundle. Here is the general perimeter of several biggest ecosystems covering exposure to some of the key pillars:

Ecosystems are aimed at covering all of the consumer needs, meaning that at some point you may be able to buy a lifetime subscription for services and products that meet all your major, shared and even unique needs. While no company has yet provided an all-encompassing subscription offer for all necessary goods and services, what we have seen in recent years is the introduction of offers that cover multi-vertical products. This strategy is called a bundle, and it is what we will be examining further in this paper.

What is a bundle of an ecosystem?

A bundle is a monthly or yearly subscription that gives you access to better offers (discounts, free-features, simple access) for different services inside one ecosystem. The main idea behind offering a bundle to a consumer is pretty straightforward — if you use several of the company’s products, you can get a discount.

Bundle offers work as follows: consumers pay X USD monthly to subscribe to the bundle and, in return, they receive discounts for Y products, subscriptions for Z products, and additional free features with L products.

Bundle offers have a long history — early bundle offers were created by telecom operators, banks and entertainment companies. We are already familiar with telecom bundles where you pay fixed subscription and get the bundle of X minutes of phone calls + Y GB of internet + free usage of WhatsApp. Another example would be premium banking cards where you pay an annual subscription and receive cashback + concierge service + other perks. Consumers are already used to this model. The model is being reinvented by the ecosystems that can offer all the products and services that you need instead of being confined to just one type of service such as telecommunications or banking plus special offers.

We found five ecosystems that have introduced a new form of bundles — Amazon, Alibaba Group, Yandex, Rakuten Germany and Yahoo! Japan. Some of these bundles were launched just recently . Offering bundles among ecosystems is a relatively new field, but it is one worth exploring because the near future will see many more experiments and launches in this field. Let’s look at some existing bundles in more detail.

Case studies: Amazon Prime — “The everything bundle”

One of the first bundles (and the most successful one by far as of today) was introduced by Amazon. Amazon Prime bundle will cost you 12.99 USD monthly or 119 USD annually, in order to receive the following perks:

  • 1-day, 2-day, same-day and Prime Now free shipping
  • Subscriptions to Prime Video, Prime Music, Audible Channels, Kindle Unlimited, Prime Reading, Twitch Prime
  • Prime Photos (cloud storage service)

Now Amazon Prime is in the top-3 subscription services in terms of the number of users (100M — announced on 18/04/2018 in the letter to shareholders):

Source: Retail Vs. Amazon — Customer Acquisition, CPG, and Furnishings War Escalates; Retailers Making Strides on Last Mile, J.P. Morgan research

The Prime bundle was first introduced in 2005 at 6.5 USD per month and included free shipping of products from Amazon. Based on J.P. Morgan research, let’s look at unbundled Amazon Prime subscription:

Source: Retail Vs. Amazon — Customer Acquisition, CPG, and Furnishings War Escalates; Retailers Making Strides on Last Mile, J.P. Morgan research

We can see that the customer pays 119 USD (annually) for a product valued at 784 USD. In other words, the customer gets a 6.6X return. It should be noted that now the customer also gets 30 days free-trial before the purchase.

Case studies: Alibaba’s 88 VIP

In 2017 Alibaba introduced 88 Membership program to create a joint loyalty program for marketplaces Tmall and Taobao. Every customer gets a membership score called Taoqizhi. The score is calculated based on user’s activity and engagement in Alibaba ecosystem including number of purchases, number of visited stores, activity in social media about the marketplaces, number of reviews written and many other factors are taken into consideration for score calculation. All customers are divided into three categories based on the score level: Standard members (less than 1,000 points), Super members (1,000+ points) and APASS members (2,500+ points). In order to reach APASS level the customer needs to spend more than 15,000 USD annually and Alibaba disclosed that on average APASS spend about 45,000 USD in one year. Depending on the category customer gets different perks like discounts of top brands, coupons for further purchases, subscriptions (from services to mobile operators), subscription to concierge services (specially for APASS members), invitations to special events from Alibaba and even some perks in Marriott loyalty program. Alibaba sees 88 Membership as a platform to introduce loyalty programs from different merchants to Alibaba ecosystem customers — Daniel Zhang (CEO Alibaba Group):

“We provide platforms for brands to reach their consumers. We see it [88 Membership program] as our opportunity to build a unique, global brand alliance, where the loyalty schemes of each brand can be connected to Alibaba’s membership system”

In August 2018 Alibaba introduced subscription based bundle offer for 88 Membership club — 88 VIP. 88 VIP bundle costs 13 USD (88 RMB) annually for Super members or APASS members and 130 USD (888 RMB) annually for everyone else. The bundle includes the following perks:

  • 5% discount in Tmall, Tmall Supermarket, flagship shops, Tmall Global and Taobao;
  • 44 USD annually (300 RMB) of coupons for purchase of consumer electronics in Tmall;
  • Subscription to video-streaming platform Youko Tudou — it grants access to exclusive shows, gives discount (up to 50%) for some paid shows and eliminates ads;
  • Subscription to music-streaming platform Xiami — gives access to exclusive releases and allows to download up to 500 songs every month;
  • VIP Subscription to on-demand food delivery service Ele.me — grants 3 USD monthly (20 RMB) of coupons on any order;
  • VIP subscription on online ticketing portal Taopiaopiao — allows to get up to 2,3 USD monthly discount on tickets purchases.

Alibaba Group claims in its release that the return on the bundle can reach up to 291 USD (2,000 RMB). Let’s unbundle it:

The total intrinsic value of the bundle for the user with rather moderate consumption is about 166 USD annually (about 1140 RMB), it can be higher with more intense consumption and probably reach 2000 RMB stated by Alibaba group (the cost for the bundle for Super member is 13 USD annually and for Standard member is 133 annually).

The return for the Super member (or higher) on this bundle is about 12,8X, while for the Standard member this ratio is about 1,25X. The idea of such an “economical discrimination” is rather interesting and such a pricing strategy can be a real motivation for Standard user to increase the consumption and engagement to reach the Super member status.

One of the main reasons for starting the bundle for Alibaba are the following:

  • Bundle helps to create better offers for wealthy (Super and APASS) customers. It is a strong proposition in competition of Tmall and Taobao with Pinduoduo and JD on e-commerce market and in competition of Ele.me with Meituan on food on-demand delivery market;
  • Bundle is supposed to boost customer base and increase market share of Alibaba’s subscription services (Xiami is on the 5-th place among music streaming services in China and Youko Tudou is on the 3-rd place among video-streaming services in China at the moments).

It seems that Alibaba plans to promote Standard members and Super members into the APASS members via the bundle which motivates clients to use Alibaba ecosystem more. It is said that APASS member returns 10X more than Amazon Prime subscriber. In order to move to the other category the user needs not only increase the usage of Alibaba ecosystem but should be more engaged in the ecosystem and basically become ecosystem’s brand ambassador. Based on data from Alibaba there are tens of millions members of 88 Membership, but it is too early to estimate dynamics and of 88 VIP subscribers as the bundle has been launched just recently.

Case studies: Yandex.Plus

Yandex introduced a bundle called Yandex.Plus in the summer of 2018. For just 2,5 USD per month (with the first 3 months being a free trial) you get the following:

  • A subscription to Yandex.Music (most popular music streaming service in Russia);
  • 10% discount on Yandex.Taxi (main ride-hailing operator in Russia that merged with Uber) for rides in premium classes and a 5% discount for the car-sharing service Yandex.Drive;
  • 10GB Yandex.Disk Subscription (cloud storage service);
  • Ad-free subscription to KinoPoisk (movie streaming);
  • Free delivery with Yandex e-com marketplace Beru, developed jointly with Sberbank (biggest bank in Russia with $60bn Mcap).

Some offers in the bundle are really lucrative (for example subscription to Yandex.Music or discount for Yandex.Taxi), while others are just additional offers and by now can’t be the main motivator for the user to buy the bundle. For example, KinoPoisk still does not have a stand-alone subscription and Yandex probably wants to test the model on the most loyal customers of the company (those who buy the bundle), to get more data and then introduce the stand-alone subscription.

Let’s calculate how much this bundle is worth for the customer:

* The comparison is based on 100GB plans divided by 10 prices (there are no 10 GB plans)

Ultimately, the customer pays 2.5 USD per month for a 14.4 USD value, producing a return of 5.28x for the customer. If we take into consideration that the first 3 months are free, it becomes a 7.1X return for the customer for the first year. It should be noted that we made our calculations assuming a rather moderate usage of Yandex.Taxi (3 rides per month). The higher the frequency and usage the greater the value that can be extracted.

Case studies: Rakuten

Rakuten introduced the Rakuten Club in Germany which is similar to a bundle. For 22.5 USD (19.9 EUR) annually you can get a bundle that includes the following 4 perks:

  • Free shipping on Rakuten.de marketplace;
  • 5X cash-back bonus on the marketplace;
  • Access to film-streaming — the access is limited to selected films (about 100 films are available every month);
  • Free calls from Viber to outside numbers.

Right now, Rakuten looks like an immature bundle which will be improved as the ecosystem of Rakuten in Germany grows. But still, the intrinsic value of the bundle is rather high:

As the bundle does not include any subscription-based products (we do not regard the film streaming as part of the subscription due to the fact that it is very limited in comparison with Netflix or Amazon Prime offerings) the intrinsic value of the bundle is highly dependent on the amount of services used. For a person who uses the marketplace with little frequency (once per month) the intrinsic value compared to the price is still rather high: 6.2X.

Case studies: Yahoo! Japan

Yahoo! Japan introduced its own loyalty program called T-points — the points are paid by the merchants on the platform. The premium status grants several opportunities to earn higher T-points — the rate is increased by 5X (5%) for travel and marketplace purchases. In addition, the holder of the premium status gets different special offers from partners of Yahoo! Japan — shops, restaurants etc., as well as discounts to public WiFi services. Overall, the special offers do not appear very lucrative and look more like simple partner programm. This much simpler “bundle” program is more like a simple premium banking card. The subscription costs 4.16 USD per month. To reach the break-even, customer should buy more than 104 USD worth of goods per month. We did not evaluate the return value of the program since it is based only on increased cash-back offers, but will follow its development.

The economics behind companies’ bundles: Yandex’s example

Now let’s consider what Yandex gets from every user who buys the bundle. First of all, Yandex extracts additional revenue from commission-based services like Yandex.Taxi or Beru as well as converts free users to paying users of Yandex.Disk. High frequency usage of Yandex.Music and KinoPoisk doesn’t bring Yandex additional revenue.

We focus on analysis of Yandex’s return based on the usage of Beru and Yandex.Taxi, as 10Gb Yandex.Disk proposition is not very valuable. Below you can see the chart of Yandex’s revenue for a bundle user and non-bundle user making only one purchase on Beru marketplace every month, not converting into a loyal user of Yandex.Disk. Number of Yandex.Taxi rides per month is on the X-axis:

The average take rate of Yandex.Taxi is about 25%. Yandex gives up less than 50% of the margin on users with bundles due to discount. Let’s consider two most relevant user cases.

Case 1 — user, who had not used Yandex.Taxi before buying Yandex.Plus and had only 2,5 USD monthly subscription on Yandex.Music. In this case no matter how much the customer uses Yandex.Taxi or Beru Yandex gets more profit from this customer after the first purchase.

Case 2 — the customer has been using Yandex.Taxi in economy class, but Yandex is motivating a user to choose a higher class (Comfort, Comfort +, Business or Premium) due to 10% discount for these classes. The upgrade results in the increase of the AOV: the AOV of Comfort class is on average 30% higher than for Economy class. In order to preserve the same margin as without the bundle, Yandex needs to increase the number of rides by 30–55%. By introducing bundle Yandex gives up some of the margin but can compensate it thanks to increased AOV and usage frequency.

Why ecosystems are launching bundles?

Let’s take a closer look at Yandex.Plus as an example once again and think about rationale and incentives for its launch before summarizing main goals and uses cases for developing bundles.

Yandex.Plus has approximately 1 mln. users as all Yandex.Music users were converted to Yandex.Plus. The main acquisition channels of Yandex.Plus are Yandex.Music and KinoPoisk (video streaming and content). Yandex probably sees Yandex.Plus as a framework for the monetization of services inside of the Yandex ecosystem and as a loyalty program for the entire ecosystem.

We believe Yandex’s main reasons for launching Yandex.Plus are presumably the following:

  • Segment and communicate with the wealthier audience;
  • Centralize the process of working with different Yandex products in the ecosystem; Yandex.Plus creates one loyalty program that does not make the user go crazy (as different loyalty programs for different products often do), while focus is shifted to the retention of the user inside the ecosystem, not just one product;
  • Unite and unify infrastructure of services (payments, login process, passbooks, back office. etc);
  • Increase the average check of Yandex.Taxi users and acquire more users for Beru marketplace.

And of course there are still areas for improvement:

  • Some of the products are still in beta mode including Beru with limited SKUs;
  • Number of services can be expanded as many of Yandex’s services are not included;
  • Some infrastructure and product elements as well as payment options can be unified.

The most successful case for Yandex and presumably any other ecosystem is the acquisition of users that do not use any of their products at the moment. The bundle’s acquisition costs are lower than acquisition costs for taxi apps for example because the bundle can acquire users through less competitive or more efficient CAC (customer acquisition cost) verticals like music streaming and then convert them in taxi users. However, customer who doesn’t use any of the company’s products will unlikely pay for the bundle that includes all of ecosystem’s products.

So we arrive at the following main goals and use cases of creating bundles:

  1. Make ecosystem’s overall product proposition sticky. The key goal is to bundle user for life, expand number of services as the ecosystem develops and extract higher margins on the back of higher AOV and frequency. It is also a powerful tool in driving loyalty and creating an army of brand ambassadors as we’ve seen in case of Alibaba
  2. Differentiate wealthier customers and offer them better terms to increase GMV and, possibly, profits;
  3. Convert a customer who uses one or two services into a user of several services (especially commission-based or transactional) by also cutting down the acquisition cost for other services. For example, the bundle offer is similar to the subscription on Yandex.Music in terms of price, as it also costs 2,5 USD per month, but bundle is definitely more valuable. And Yandex gets a user that with high probability will use Yandex.Taxi or Beru (a clear positive return for Yandex) without any acquisition costs. In other words Yandex cuts acquisition costs for such a user by 20–30 USD (average CAC for taxi apps in Russia). At the same time the user gives up products and services of direct competitors and switches from Google.Drive to Yandex.Disk or from Gett to Yandex.Taxi as an example.
  4. Give the loyal user an impetus to increase spending on new services. In case of Yandex the user either changes the class of his ride from economy to comfort due to the discount or gives up using other marketplaces by switching to Beru. Yandex gets higher GMV and sometimes a higher contribution margin (if the number of purchases sufficiently increased).
  5. Fight with single-vertical competitors. Bundle can help to strengthen the ecosystem’s position in the developing verticals (like video or music streaming for Alibaba) and to empower the competition on intense markets (like food delivery for Ele.me) .

Bundles pricing

It seems that pricing the bundles is a rather simple case since the main aim is to convert a user of 1–2 services into the loyal user of the company’s products. Hence, the price of both Yandex and Amazon bundles is between 1–2 monthly prices of the individual subscription services (closer to 1, in fact). Yandex has priced Yandex.Plus at 1X the cost of Yandex.Music (the only real subscription product included in the bundle). Amazon Prime is priced at 1.3X the cost of a Prime Music or Kindle subscription and 1.4X the cost of a Twitch subscription. The more mature and valuable the offer is, the closer its price is to 2X.

The pricing of 88 VIP of Alibaba is a bit different from Yandex.Plus and Amazon Prime. 88 VIP bundle for Super members is priced lower than the subscription on any of the services included into the bundle. Bundle is priced at 44% of subscription to Youku VIP (video-streaming) and at 60% of subscription to Xiami (music-streaming). This can be explained by two arguments:

  • These streaming subscriptions are not that popular (not the most popular services) in China, so Alibaba needs to offer lower price ratio to acquire users
  • There is a discount for Super members who are of a high value for Alibaba

As for standard subscription, it is priced 4–6X to streaming services subscriptions motivating customers to get higher rating.

Amazon, Yandex and Rakuten are very similar in terms of their value to pricing ratio — the bundle returns 6–7X the cost to the customer, indicating a likely current rule of thumb. Bundles should include recruiting products — products that are not the main streams of revenue for the bundle and are not the most strategic growth assets for the company (like Yandex.Taxi is a growth asset for Yandex.Plus bundle and Yandex) but recruiting products help to acquire users. Granting the use of these products to the user should not in any way increase costs for the company. Finally, the bundle should include a product (commission-based or transactional) that is considered the main revenue stream from the bundle users — like Amazon Marketplace, Tmall, Ele.me or Yandex.Taxi/Beru. This bundle structure gives the company an opportunity to differentiate wealthy customers from others and receive a return on them that is often missed when a single product is offered on its own. It seems that the presence of commission-based or transactional products helps to maintain the 6–7X value to price ratio.

Alibaba has a two times higher value to price ratio mainly due to difference in pricing between different types of members. The Standard members have the 1,25 value to price ratio which is 5 times lower than Amazon Prime and Yandex.Plus. But it shouldn’t be considered as an exception — due to two different types of pricing for different groups of members.

If the bundle does not include any commission or transaction-based products (like taxi or marketplace), the pricing should be different. It could be similar to the price of 2–3 subscriptions to individual products. However, it makes less sense for the company to motivate users to use more of subscription-based products in comparison with commission-based or transactional products — it results in less increase in revenue. We also conclude that introduction of bundles that consist only of subscription-based products is unlikely.

Competitiveness of a bundle vs a single product player

Let’s consider music streaming market. The competition in the music streaming market has begun to intensify, meaning that users take into account not only the content and usability but also the availability of additional lucrative perks. If the product proposition is similar between streaming services then the choice that the user is going to make is rather obvious. The ecosystem with the bundle also gains a competitive advantage in terms of user acquisition costs — it is much cheaper to convert a user of your other services via a bundle offer.

Non-ecosystem players cannot produce such a holistic product proposal, but can compete focusing on the quality of the product and service, add and create unique content, develop b2b business streams or form partnerships and JVs with other companies to create a synthetic bundle.

It will be interesting to follow progress of Alibaba’s 88 VIP bundle on the markets of video/music streaming, e-commerce and on demand food delivery. The next 12 months will provide us with lots of insights about competition of ecosystem’s bundle with single vertical companies (despite being in the ecosystem of Tencent). Probably it will result in introduction of Tencent bundle with a purpose to compete with Alibaba’s 88 VIP.

A bundle offer can indeed be a powerful tool when competing with a single-product competitors. However, developing and managing a successful bundle is a major product and business development effort itself that should not result in deprioritization or a slower development of each individual product included in the bundle.

Focused single-vertical business can be faster and more flexible. So in order to succeed, the ecosystem should think early about resources, processes and infrastructure elements that should increase success rate. For example own payments businesses inside ecosystems can be a huge competitive advantage in terms of speed and flexibility. With a leading payment company prioritizing your tasks it is easier to make loyalty programs, cashbacks, make the unified payment process and e.t.c. This is why 8 of 9 biggest ecosystems have their own or large exposure to payment solutions and invest heavily in the space.

Ecosystems can also leverage big data. The data provides ecosystem with a possibility to make smart upsales. If Amazon knows what music you love and what movies you watch, it can make rather good predictions about what books will be of interest to you or which Twitch streams you might like. Some ecosystems know so much about a consumer that in not so distant future can start offering loans to customers on the back of proprietary scoring models. Ecosystems with an edge in artificial intelligence (“AI”) will be the most competitive. There is not much time to adapt AI for almost any consumer business (the graph depicts the percentage of change in cash flows of AI adopters) showing that in 2–3 years from now the gap between early adopters and everyone else will be widening exponentially.

Numbers on the graph are in %.

As the world becomes more concerned with privacy protection, there will be a huge responsibility to protect the data on one hand and allow users to benefit and monetise their digital footprint on the other hand.

Bundles also create hard times for anti-monopoly regulators — a bundle holder can definitely become a monopoly on the user’s choice, not a monopoly on the limited market, which is how monopoly is defined currently. Potentially some new criteria should be added and attributed to the definition of monopoly as the time user is spending in the ecosystem and share of consumption via the ecosystem are becoming increasingly important.

What’s next?

Will the well known telecoms, financial giants or fintech and messaging disruptors like Revolut and Telegram run the bundles? For now, they can serve as a good foundation for joint loyalty programmes especially for single product companies that want to battle the ecosystems. The banks already do the proto-bundles (“grandfather of bundles”): premium cards with high monthly or annual fees costs that provide cashback and / or special offers on various services, restaurants, entertainment etc. We are in the middle of a process that finds banks and telecom operators no longer concentrating on their primary sector and instead trying to become ecosystems. SoftBank via its Vision Fund is making sizable diversified investments, some banks and telecoms follow the suit and invest in mobility, entertainment, e-com, etc. In the coming years, we will see the rise of even bigger ecosystems that will be introducing bundles.

It will be interesting to look at the future moves of Tencent, Softbank, Mail.Ru and other ecosystems. Business composition and recent moves layout bright prospects for some of the names including Mail.Ru to create powerful bundles. Recently Mail.Ru, Megafon (one of Top 3 telecom operators in Russia), Alibaba Group and RDIF (Russia Sovereign Fund) signed a deal to create an e-commerce JV called AliExpress Russia. In addition to main social networks in the region Mail.Ru owns leading players or has exposure to practically all main consumer verticals including food delivery, taxi, games, cybersport, music and classifieds.

The bundle strategy is still relatively new and who will dominate this increasingly important strategy is still unclear. We will continue to follow this topic and issue an update in 2019.

If you wish to subscribe to our reports or get in touch to discuss any particular topic mentioned in this report please send us a message (please see contact details below).


Misha Sokolov, Author, Linked.in, Twitter — @myellowpants, Telegram — @mishasokolov

Nikita Bulgakov, Co-Author, Linked.in, Telegram — @nikibulita

If you have any question or suggestion please send email on robotmaynot@gmail.com

Special thanks

We wish to express our gratitude to Vitaliy Kolesnik and Blair Dunbar for editing, Andrey Kondratyuk and Andrey Molchanov for comments and suggestions, Katya Ivanova for help in the distribution of the report, Filipp Nekhaev for designing graphs and Sasha Pokhvalin for the illustration on the cover page.


  1. Christopher Horvers, CFA, Tami Zakaria, CFA, C. Jerry Sullivan, Tori K Bertschy, Doug Anmuth, Cory A Carpenter. J.P.Morgan North America Equity Research “Retail Vs. Amazon — Customer Acquisition, CPG, and Furnishings War Escalates; Retailers Making Strides on Last Mile
  2. Jacques Bughin, Jeongmin Seong, James Manyika, Michael Chui, and Raoul Joshi “Notes from the AI frontier: Modeling the impact of AI on the world economy” Link -https://www.mckinsey.com/featured-insights/artificial-intelligence/notes-from-the-ai-frontier-modeling-the-impact-of-ai-on-the-world-economy

Table 2 Footnotes:

Yandex.Money is jointly owned by Yandex (25% + 1 share) and Sberbank (75%)

Tencent was a lead investor of Vipshop (total round 863 mln. USD)

Tencent owns 15% stake in JD and made several joint investments together

Tencent is an investor in Shopee

Beru is a JV of Sberbank and Yandex

Pandao is the part of JV AliExpress Russia between Mail.Ru, RDIF (Russia sovereign fund), Megafon and Alibaba.

Tencent is one of the biggest investors in Meituan Dianping. Alibaba owns a minor share in this company

Mail.Ru was one of investors in Instamart in 2016

Google Ventures invested up to 300 mln. USD in Uber

Google participated in 1.2 billion USD round of Go-Jek in 2018

Alibaba participated in 7.3 billion USD round of Didi Chuxing in 2016

Tencent participated in 7.3 billion USD round of Didi Chuxing in 2016

Tencent led 600 million USD round of Mobike in 2017

Rakuten is an active investor in Cabify and participated in several rounds

Mail.Ru participated in 100 million USD round of Taxi “Везёт” in 2018

Google Capital (arm of Alphabet) was an investor in Snap

Yandex participated in several rounds of Doc+



Misha Falcon

Building industry reshaping tech & healthcare companies🦄| CEO @OneTwoTrip | Co-founder @MNFST | Chairman @Wheely | Committed to saving the environment 🌏