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See the full story · 4 sourcesAt least 20 Wildberries warehouses have been attacked since July 18
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Ukraine has hit a major logistics hub of Russian online retailer Wildberries in Yekaterinburg, east of Moscow, continuing its three-week campaign of near-nightly strikes.
At least 20 Wildberries warehouses have been attacked since July 18, sparking major fires, destroying entire warehouses of stock, and disrupting its vast logistics network across the world's largest country. A Reuters review of satellite imagery shows at least 1.18 million square metres of storage space - more than a fifth of the company's capacity - has been damaged or destroyed.
The strikes are part of a campaign by Ukraine to "bring the war home" to ordinary Russians and raise the cost to Russia of continuing the conflict that Moscow launched in February 2022.
Wildberries, whose vast product range includes items such as night-vision goggles, ammunition pouches and helmets, alongside regular clothing, cosmetics and electronics, is a linchpin of the consumer economy and is often described as Russia's answer to Amazon.
Kyiv accused the firm of helping to bolster Vladimir Putin ’s war machine. The company and the Kremlin say it does not supply to the army.
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.
The company, with a few of its warehouses hit as recently as Thursday, said on Telegram it had paid a second tranche of financial support to nearly 100,000 sellers whose goods were damaged.
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. The marketplace features clothes, books, cosmetics, toys, appliances, household items, sports gear and much more. There’s an “E-Pharmacy” page and a travel section for booking plane tickets or hotels.
It operates a vast network of warehouses, sorting centres, and logistics hubs across Russia.
In 2021, Kim acquired a small bank and turned it into what is now Wildberries Bank, but that institution has since come under sanctions by the U.K. and the European Union.
Now, its facilities are being deliberately targeted by Ukrainian drones .
Wildberries, together with other e-commerce platforms, handles goods and services worth the equivalent of 8.5 per cent of Russia's economy.
Kyiv’s reasons for attacking Wildberries appear to be two-fold.
Ukrainian officials say that the company's warehouses and transport network are actively involved in storing or transporting 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 per cent of Russia's GDP.
They support around four million jobs, or more than five per cent 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.
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 amount of stock as a result of Ukrainian attacks.
Meanwhile, the US Senate took the first steps toward passage of a sweeping Russian sanctions bill .
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.
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