Wildberries: Why Ukraine is blowing up Russia’s ‘Amazon’ with massive strikes

Wildberries: Why Ukraine is blowing up Russia’s ‘Amazon’ with massive strikes Kyiv has targeted warehouses and logistics centres in a bid to bring the impact of the war home to ordinary Russians - Bookmark - CommentsGo to comments Ukraine launched a wave of overnight drone strikes deep into Russia early Wednesday, hitting a major logistics hub belonging to e-commerce Wildberries in the Ryazan region. At least nine Wildberries facilities have been targeted in the past two weeks as Kyiv steps up attacks on warehouses, after accusing the firm of helping to bolster Vladimir Putin’s war machine. According to Data Insight analyst Sergei Semko, goods destroyed by strikes on Wildberries warehouses in Moscow and Tambov regions alone were worth up to an estimated $2.9 billion. What is Wildberries? Wildberries is Russia's largest online marketplace. It has been called the country's equivalent of Amazon, as its business model resembles a mix of Amazon Marketplace, eBay, and Temu. Founded in 2004 by Tatyana Kim, who is now Russia's richest woman, the company has since become the dominant e-commerce platform in Russia and several neighbouring countries. Hosting millions of third-party sellers, the platform sells almost everything, from electronics to groceries. It operates a vast network of warehouses, sorting centres, and logistics hubs across Russia. Now, its facilities are being deliberately targeted by Ukrainian drones. Why is Ukraine attacking Wildberries? Kyiv’s reasons for attacking Wildberries appear to be two-fold. Ukrainian officials say that the company's warehouses and transport network is actively involved in storing or transport goods that ultimately support the Russian military, a claim Moscow denies. Because Kyiv alleges that the company is part of Russia's wartime logistics and economic infrastructure, they insist Wildberries’ infrastructure is a legitimate target. However, the attacks also appear to be part of an attempt to increase economic pressure on Russia. An executive at Ukraine’s leading arms producer, Fire Point, emphasised that Wildberries is being targeted partly because of its partnership with state-controlled bank VTB. In an interview posted on Monday, Denys Shtilerman, Fire Point’s co-founder and chief designer, described Wildberries as the largest borrower in Russia and said its demise would lead to the collapse of a large number of banks, including VTB. Described as the “backbone” of what the Kremlin calls the Russian “platform economy,” Wildberries has been considered central to plans for economic growth after the government purchased a 5 per cent stake in the company earlier this year. Together, Wildberries and competitor Ozon, account for economic activity worth around 8.5% of Russia's GDP. They support around 4 million jobs, or more than 5% of Russia's workforce. As the country continues to face a steadily-weakening rouble, and a steadily-increasing inflation rate, the central bank has cut its key interest rate to 14 per cent, highlighting the growing strain on Russia's wartime economy. Continued Ukrainian attacks on Wildberries are set to further add to this pressure. How has Russia responded? For Russia, the attacks on Wildberries mark another severe economic blow amidst the increasing cost of sustaining its war in Ukraine. The Kremlin has acknowledged it may have to financially prop up Wildberries, which has lost 10 per cent of its warehousing capacity and a huge amounts of stock as a result of Ukrainian attacks. Meanwhile, the US Senate took the first steps toward passage of a sweeping Russian sanctions bill on Tuesday. After meeting with Ukrainian president Volodymyr Zelensky, the bipartisan procedural vote secured an 86-12 majority. The bill is set to penalise countries that continue to buy Russian oil, gas and other exports. Join our commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies Comments