Key facts
- Ukraine has targeted Wildberries, Russia's largest online retailer, with drone strikes on its warehouses.
- Seven Wildberries warehouses have been hit since the weekend, with two struck overnight on July 24.
- Approximately 10% of the company's logistics hubs have been damaged.
- The strikes are intended to disrupt Russian military logistics by targeting dual-use items sold on the platform.
- The attacks are also impacting small and mid-sized Russian businesses and potentially contributing to inflation.
- The Wildberries-Russ merger involved a transaction personally approved by Vladimir Putin.
Ukraine has escalated its drone campaign by targeting warehouses belonging to Wildberries, Russia's largest online retailer, an equivalent to Amazon. The e-commerce giant, which holds nearly 50% of Russia's online retail market, has seen its operations significantly disrupted by recent strikes. Videos have emerged showing large fires engulfing logistics centers across Russia, with seven warehouses reportedly hit since the weekend, including two in a single night.
According to Kyiv, the targeting of Wildberries is strategic, as the platform facilitates the sale of dual-use items, including military products like bulletproof vests and drone components, alongside regular consumer goods. These items can be used on the battlefield against Ukraine, making the warehouses potential military targets under international law, provided precautions are taken to minimize civilian casualties. Experts also note a secondary effect: the disruption is impacting the morale of many Russians.
Wildberries' support for Russia's war effort extends to its role as an intermediary for pro-war volunteer movements that purchase crowdfunded military equipment. While not the primary supply channel for the Russian army, these sales are significant. The strikes also have a substantial economic impact on hundreds of thousands of small and mid-sized Russian businesses that rely on Wildberries for customer reach, many of whom are uninsured and lack financial cushions.
In response to the attacks, Wildberries' founder Tatiana Kim promised compensation to sellers, though this may be limited to discounts and service advantages. Competitor Ozon has stated it will not compensate for losses due to military activity. Wildberries later announced it would compensate sellers for lost goods, a move that could further fuel inflation. Economists suggest the Russian government may subsidize Wildberries, potentially through favorable loans from Sberbank, with compensation from the Central Bank leading to higher inflation.
Beyond the economic impact on businesses and potential inflation, the strikes on warehouses will lead to more difficult logistics and higher prices for goods for millions of Russian consumers. There are also indications that the financial repercussions could extend to individuals close to Russian President Vladimir Putin, as the Wildberries platform merged with Russ, a company reportedly controlled by relatives of lawmaker Suleyman Kerimov, a deal personally approved by Putin.