Ukrainian attacks on sprawling Russian warehouses have produced stark images, with huge plumes of black smoke rising above fires at facilities belonging to Wildberry, the country’s largest online retailer and its Amazon equivalent.
Kiev’s drones struck the sites for the first time over the weekend in Elektrostal, just east of Moscow, and in the Tambov region, killing eight people and wounding dozens. Two more Wildberry warehouses – in the southern Krasnodar and Stavropol regions – were attacked and set on fire early Wednesday. One person was killed and 14 others were injured.
These strikes come as part of an air campaign launched by Kiev inside Russia, with the aim of undermining its wartime economy and making its citizens feel the consequences of the Kremlin’s comprehensive invasion of Ukraine.
A look at Wildberry and how it became a wartime target:
A retailer that has grown since 2004
Wildberry was launched in 2004 by Tatiana Kim, a teacher and young mother at the time, and initially focused on selling clothing.
Since then, the platform with its distinctive purple logo has become an industry leader and a household name, allowing businesses both large and small to sell their goods to customers across the country by storing, shipping and delivering their inventory. In April, Forbes Russia estimated Kim’s wealth at $8.1 billion.
The market includes all kinds of goods – clothes, books, cosmetics, toys, appliances, household items, sports equipment and much more. There is an “e-pharmacy” page and a travel section where users can book plane tickets or hotels.
In 2021, Kim took over a small bank and turned it into what is now known as Wildberry Bank, but this institution has since been subject to sanctions by the United Kingdom and the European Union.
Last year, Kim said the company had more than 200 facilities totaling more than 5.2 million square meters (55 million square feet), with plans to expand in 2026, including planned warehouses in Belarus and Kazakhstan, where Wildberry already operates.
Between 500,000 and 800,000 sellers participate in Wildberry, estimates Sergey Simko, a senior analyst at Data Insight, a Moscow-based company that analyzes online retail in Russia.
Wildberry currently accounts for 52% of all online orders in Russia, Simko told The Associated Press.
Kyiv says the affected facilities supply the Russian army
While Ukrainian President Volodymyr Zelensky did not mention Wildberries directly, he did say that the facilities his country attacked were involved in the supply of equipment and various technical components to the Russian military.
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Kremlin spokesman Dmitry Peskov said on Tuesday that “this is not the case,” and accused Kiev of continuing to “strike civilian targets.”
An AP search of Wildberry’s website showed goods that could be used for both civilian and military purposes, such as body armor, helmets, radios and other electronic devices. Some of these operations have even been labeled as “SVO-tested” or “selected SVO fighters” — the Russian abbreviation for “special military operation,” the term the Kremlin uses to refer to the war in Ukraine.
Wildberry did not immediately respond to a request for comment.
Russia regularly attacks Ukrainian logistics and retail facilities, including several that were bombed last week.
These attacks are a blow to small businesses in Russia
Simko said the attacks dealt a strong blow to many small businesses in Russia.
Online retailers such as Wildberry and its competitors Ozon and Yandex Market have enabled local artisans and entrepreneurs to sell their goods across Russia’s vast territory, he added.
Since Saturday, people have taken to social media to say that their business inventory that Wildberry was storing at the facilities that were attacked had been destroyed, and tearfully recounted their losses.
It is difficult to measure the extent of the damage to the four warehouses.
Wildberries said it took three days to extinguish the fire at the facility in Elektrostal, Moscow’s main distribution hub, but the site in Kotovsk, in the Tambov region, is scheduled to resume operations on Thursday. Kim and the company did not clarify the extent of the damage.
“The situation is difficult due to the losses incurred by the company itself and representatives of small and medium-sized companies,” Peskov said on Tuesday.
In order to support vendors, Wildberry has offered discounts on storage fees, free transportation of goods to other facilities, discounted loans at Wildberry Bank and other measures.
Many wondered whether they would be compensated for their losses. Earlier this month, the company changed its seller policy and is now exempt from liability for inventory damaged due to “force majeure,” which includes drone attacks.
Late Wednesday, Kim said the company had begun paying vendors whose inventory was damaged at the Electrostall location. “First and foremost, we want to support the smallest and most vulnerable entrepreneurs – there are more than 88,000 of them,” she said. “The funds will appear in seller balances within 24 hours.”
Simcoe cautioned that there was not enough data to make an assessment, but he estimated that the four affected facilities represented about 12 percent of Wildberries’ total warehouse space. He said that merchandise losses could reach about three billion dollars.
This loss comes in addition to increased taxes, the fuel crisis and additional regulatory hurdles that many Russian small businesses face this year, he said.
“It’s almost a perfect storm,” Simcoe added.
The strikes also undermine Russian morale
Chris Weaver, CEO of consulting firm Macro Advisory Ltd., said Russia’s online retail sector has grown rapidly since 2022. It represents about 20 percent of Russia’s total retail sales, “and that’s coming from well under half that amount five years ago,” he told the AP.
Weaver said that after many Western brands withdrew their business from Russia due to its war in Ukraine, Wheelbreads and Ozone were able to source products that were no longer available in malls via parallel imports from Asia, the United Arab Emirates and Turkey, which led to rapid growth in the online business.
He estimated the value of Russia’s e-commerce sector at about $150 billion, and online retail at about $80 to $90 billion of that amount.
Weaver said the warehouse attacks had increased the suffering of small businesses, which in recent years had been “struggling very hard,” while perhaps causing only “relatively minor” damage to the industry and the economy overall, which he described as virtually stagnant, but stable.
Instead, he said, it was about “undermining public morale, getting people to talk a lot more” about the war and questioning the Kremlin’s actions.
Since Russia invaded Ukraine in 2022, people have seemed largely content with the fighting.
“It was something that happened far away,” Weaver said. That changed this year, he added, as regular strikes on oil refineries in parts of Russia sparked massive fires, and now the Wildberries.
“There is now much greater awareness, but there is also more discussion, more people are asking what is happening and why it is happening and the conflict continues for so long,” he said. “It brings him home.”
