Ukrainian drones have hit 23 Wildberries warehouses across Russia in just three weeks, said Nataliya Vasilyeva in The New York Times. Known widely as “Russia’s Amazon”, the e-commerce giant has been targeted by Ukrainian long-range drones, with a fire breaking out overnight at a facility in Voronezh.
Ukraine claims that the company, founded in 2004 by now-multi-billionaire Tatyana Kim and has disputed links to the Kremlin, is aiding the Russian war effort. The retailer denies this.
Attacking the distribution network of one of Russia’s principal companies will increase financial pressure on consumers and retailers alike, but the longer-term threats to the Russian economy could pose a significant threat to the Kremlin.
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Wildberries, as a “linchpin of Russia’s consumer market”, is an “obvious target”, said Vasilyeva in The New York Times. It can access even the “most remote corners of the country”, making its reach in Russia “unmatched”. It is the most popular marketplace platform in the country, with 79 million people – more than half of the population – using it every month.
The strikes have “disproportionately affected” the “one million Russian sellers” who rely on the site for visibility and distribution. In a fractured country whose vast size poses significant business challenges, Wildberries’ 95,000 pick-up points “represent a sense of economic normalcy” for both retailers and consumers, “which the Kremlin has been eager to preserve” amid sanctions and economic pressure from the war.
Since the outbreak of the conflict, Wildberries has been championed as a “symbol of Russian ingenuity and resilience despite Western sanctions”, said The Wall Street Journal.
On the surface, it is a success story of economic growth, employing more than 15,000 people, having tripled its workforce last year alone. But with ties to “Kremlin-linked oligarch” Suleyman Kerimov, it is demonstrative of “Putin’s determination to restrict control over the engines of the economy to a cadre of businesspeople loyal to him”.
Ukraine’s reasons for striking Wildberries “appear to be two-fold”, said The Independent. Ukraine insists the platform is a “legitimate” target due to its involvement in “Russia's wartime logistics and economic infrastructure”. But the overwhelming motivation is a financial one. Alongside its smaller competitor Ozon and other rivals, Wildberries accounts for around 8.5% of Russia’s GDP and supports around four million jobs, “more than 5% of Russia’s workforce”. Signalled by the government purchasing a 5% stake in the company, Wildberries is considered “central to plans for economic growth”.
“Whatever the stated military rationale, the economic consequences extend far beyond the front line of war,” said finance expert Yerzhan Tokbolat on The Conversation. This latest tactic is making the “economic costs of the war harder for ordinary Russians to ignore”. The significance of the Wildberries strikes may not just be the destruction of warehouses, but rather found in the “millions of Russians whose incomes, shopping and sense of normality depend on them”.
The Kremlin’s protestation that Ukraine is attacking Russia’s civilian economy with their attacks on Wildberries “smacks of complete hypocrisy”, said Liam Nolan, Eastern Europe reporter at RTÉ. Russian forces have been destroying businesses and civilian infrastructure in Ukraine for the last four-and-a-half years, “despite the Kremlin’s insistence that it does not target civilian areas”.
Government drives to expand “long-range drone production and greater investment in deep-strike technology” have certainly pressed home the advantage. But Kyiv’s ultimate goal in targeting Wildberries – and Russia’s infrastructure more generally – is to “gain leverage in the negotiating process, whenever it restarts”.
What next?
Support for Putin will “not automatically weaken” because of these attacks, said Tokbolat on The Conversation. As of 28 July, the government announced it had been considering “loans, tax relief and subsidies” to maintain businesses, “but no decision had been made”. In fact, they could “reinforce patriotic sentiment” against Ukraine, and “generate solidarity with affected Russian businesses, rather than anger towards the Kremlin”.
“The greater political risk is cumulative.” The knock-on effects of fuel shortages and subsequent price increases, as well as a decline in small businesses, will make it harder to maintain the impression that “the war can continue without significantly changing everyday life in Russia”. But beyond outward support, Russia’s campaign depends on the “willingness of households and businesses to absorb the costs of war”. By placing a major economic engine, which affects everyday consumption, in its crosshairs, “Ukraine is testing that willingness”.
