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MOSCOW (Reuters) - Russian internet company Mail.Ru said on Wednesday it had agreed a joint venture with Alipay, the mobile payments arm of Alibaba Group, along with the Russian Direct Investment Fund (RDIF) and two other Russian partners.

The RDIF, Russian mobile group Megafon and Mail.Ru have also agreed to set up another joint venture with Alibaba called AliExpress Russia, RDIF’s Kirill Dmitriev told Reuters separately.

AliExpress, controlled by Russian shareholders, will target Russia’s rapidly growing e-commerce market which has annual turnover of more than $14 billion. Consumers will be able to use AliExpress to buy products online, including clothing and consumer electronics. The Alipay joint venture will go ahead once the AliExpress deal is completed, Mail.Ru said.

Dmitriev said that AliExpress would help small and mid-sized Russian companies to gain access to Asian markets.

RDIF has been playing an important role in developing Russia’s ties with other countries, including Saudi Arabia, Japan and China.

Russia has increased its ties with Asia and China since 2014 when it was first put under western sanctions over Moscow’s role in the Ukraine crisis. Russia and China, for example, have developed closer links in areas such as oil production or gas purchases.

Mail.Ru said under the Alipay deal, RDIF, Megafon and USM holding, a Megafon and Mail.Ru shareholder, will set up the payment JV focusing on digital payment services for Russian users.

Alipay has around half a billion users and also operates in Europe, where it is used by Chinese tourists who are traveling around the world in increasing numbers.

Mail.Ru said Money.Mail.ru and VK Pay, part of its VKontakte social network, would be part of the payment JV. Mail.Ru will be its largest shareholder with 40%.