Ukraine Wildberries strikes hit warehouses tied to Russia’s online retail

The Ukraine Wildberries strikes have put Russia’s biggest online retailer at the center of Kyiv’s campaign to disrupt the Kremlin’s war effort and bring the conflict closer to Russian civilians. Ukrainian drones hit Wildberries warehouses over several days, killing nine people and injuring scores more, according to The Associated Press.

The attacks began over the weekend and continued during the week at five more Wildberries facilities, including one in Crimea, which Russia seized from Ukraine in 2014. Fires burned at major logistics sites, with heavy damage reported in several regions.

Why did Ukraine strike Wildberries warehouses?

Ukrainian President Volodymyr Zelenskyy did not name Wildberries, but said the targeted facilities helped supply equipment and technical components to Russia’s military. Kremlin spokesman Dmitry Peskov rejected that claim Tuesday and accused Kyiv of hitting civilian targets, according to AP.

An AP review of the Wildberries website found items with civilian and possible military uses, including body armor, helmets, radios and electronics. Some listings were labeled as tested in the “SVO,” Russia’s official term for the war in Ukraine, or as a choice for fighters involved in it.

Wildberries did not respond to AP’s request for comment. Russia has also repeatedly struck Ukrainian logistics and retail sites, including several hit last week, AP reported.

What is Wildberries?

Wildberries is Russia’s leading online marketplace, often compared with Amazon because it stores, ships and delivers goods for sellers across the country. Tatyana Kim, a former teacher, started the company in 2004 as an online clothing business.

The platform now sells a wide range of goods, from books and cosmetics to appliances, toys, sports equipment and household items. It also includes an e-pharmacy page, travel services and Wildberries Bank, which has been sanctioned by the United Kingdom and the European Union.

Kim has said Wildberries had more than 200 logistics facilities last year, totaling more than 5.2 million square meters, or 55 million square feet. Forbes Russia estimated her fortune at $8.1 billion in April.

Sergei Semko, a lead analyst at Moscow-based Data Insight, told AP that 500,000 to 800,000 sellers use Wildberries and that the company handles 52% of Russia’s online orders.

Small sellers face losses after the fires

The drone attacks hit sites in Elektrostal near Moscow and in the Tambov region over the weekend, then warehouses in Krasnodar and Stavropol early Wednesday. Kim later reported strikes on facilities in St. Petersburg, the Leningrad region and Simferopol in Russian-held Crimea.

Semko told AP the damage was a severe blow for many small Russian businesses that depend on Wildberries to reach customers across the country. Some sellers posted on social media that their inventory had been destroyed at Wildberries sites.

The full scale of the damage remains unclear. Wildberries said a fire at Elektrostal, an important distribution hub for Moscow, took three days to extinguish, while its Kotovsk site in the Tambov region resumed operations Thursday. Authorities in Stavropol said a fire there was put out more than 24 hours after the attack.

Wildberries offered sellers storage-fee discounts, free transfers to other facilities, cheaper loans through Wildberries Bank and other support. The company also recently changed its seller policy to exclude liability for stock damaged by “force majeure,” including drone attacks.

Late Wednesday, Kim said Wildberries had begun payments to sellers whose goods were damaged at Elektrostal, starting with more than 88,000 smaller and more vulnerable entrepreneurs. Semko cautioned that data was limited, but estimated the affected warehouses in four regions accounted for about 12% of Wildberries’ total warehouse space and that losses of stored goods could reach about $3 billion.

Strikes add pressure beyond the economy

Chris Weafer, chief executive of Macro-Advisory Ltd. Consultancy, told AP that Russian online retail has grown quickly since 2022 and now accounts for about 20% of all retail sales. He estimated Russia’s e-commerce sector at about $150 billion, with online retail making up $80 billion to $90 billion.

Weafer said the warehouse attacks likely caused limited damage to Russia’s wider economy but increased pressure on small businesses already dealing with taxes, fuel problems and regulation. He said the strikes may have a larger effect on public morale by prompting more Russians to question the war and why it is lasting so long.

This story draws on original reporting from Fortune.