Testing the state Ukraine’s warehouse strikes won’t break Russia’s economy, but they might show Russians that their government can’t (or won’t) defend them

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Since mid-July, Ukrainian drones have struck Wildberries distribution centers in Elektrostal, outside Moscow; Kotovsk; Krasnodar; Nevinnomyssk; Tver; Voronezh; Yekaterinburg; and Kazan, as well as at two sites in St. Petersburg. Warehouses near Simferopol, in occupied Crimea, were also attacked, though the company says some premises and goods there were saved. Wildberries operates hundreds of facilities, but the fires are concentrated in the roughly 25 large centers that carry most of its volume. Wildberries holds about 45 percent of Russia’s e-commerce; Ozon holds another 30 percent. In a July 28 interview on Meduza’s podcast “What Happened” (Chto Sluchilos), economics commentator Bogdan Bakaleyko explained what the strikes mean for the company, its sellers, and the Russian economy.

‘No money to pay everyone’

According to the latest estimates Bakaleyko cites, sellers lost between 150 and 215 billion rubles ($1.9–$2.7 billion) in destroyed inventory, though the accounting is still preliminary. Rebuilding the company’s damaged facilities could cost another 35 billion rubles ($445 million). Sellers who have received compensation often report getting only a tenth of what their goods were worth. Wildberries founder Tatyana Kim says the company is calculating these payments using its own “sales simulator” to model what a seller’s stock would have earned had it not burned. Bakaleyko argues that this model is evidence that Wildberries lacks the cash to settle in full. Compare this to January 2024, when a fire at the company’s Shushary warehouse, outside St. Petersburg, destroyed an estimated 10–12 billion rubles’ worth of goods. By that August, Wildberries had compensated sellers for 95 percent of their losses, paying out nearly 35 billion rubles without resorting to any “simulator.”

‘Insulted to their faces’

Bakaleyko describes the response from corporate executives and state officials as offensive. Sellers, he says, are being insulted to their faces by the leadership of both the company and the country. While Kim says that every Wildberries warehouse is covered by air defenses, at least three major facilities packed with inventory have burned to the ground. At a press conference, she said her company legally owes sellers nothing (under liability policies the company revised on July 7 — eleven days before the first strike) but is paying compensation anyway — a concession Bakaleyko likens to a master tossing his servants a bone.

Kremlin spokesman Dmitry Peskov has endorsed this rhetoric, declaring that Wildberries had no legal obligation to pay, praising the company’s voluntary compensation as deserving “very high praise,” and saying the government has made no decisions yet about aid of its own — a stance Bakaleyko calls absurd given the attacks’ economic impact. Meanwhile, Central Bank head Elvira Nabiullina has issued a blanket wartime directive telling Russia’s banks not to push anyone into bankruptcy while the fighting continues, instructing them instead to restructure debts, extend loans, and grant deferrals.

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‘Russia created an advantage for Wildberries’

While some of the 300,000–400,000 sellers on the platform sold body armor and drone components, Bakaleyko says this is a weak justification for targeting Wildberries’s warehouses. He rejects the idea that these sales make the facilities a significant part of Russia’s war effort. Instead, Wildberries was more important to women on maternity leave looking for additional income, which is why online reactions have been most visible among young women.

The Wildberries seller base grew out of a sequence of beneficial government restrictions, Bakaleyko says. Before the war, small businesses built storefronts on Instagram and paid for regional targeting. After Instagram was blocked in 2022, however, sellers needed a new platform that would carry promotion, logistics, and storage at once. Wildberries did all three — for commissions ranging from under 10 percent to 40 percent, on terms Bakaleyko calls “opaque.” A few years later, the company has 80 million customers and 100,000 people running franchised pickup points.

‘On the state’s hook’

Wildberries’s own financial disclosures reveal a company that was already heavily indebted even before the first drone struck. Its short-term borrowing ballooned over the past year, and the company has acknowledged breaching the terms of its loan agreements — though its lenders haven’t demanded early repayment. Much of that money is owed to the state-owned bank VTB. Bakaleyko says nobody outside the company knows who controls it now, though his best guess is the billionaire senator Suleiman Kerimov, acting through VTB. A company so deeply indebted to a state bank, he says, is already dependent on the state. What will decide the outcome, he argues, is political will, not market forces.

The warehouses themselves, large as they are, can be rebuilt and replaced relatively quickly. The necessary knowledge and experience haven’t been incinerated, but a major constraint remains: financial capital and the terms on which it’s available. Bakaleyko estimates that Wildberries could recover its business within just six months, drawing on its diversified revenue streams across sellers, pickup points, sales, and banking — if Ukraine’s drone strikes stopped immediately. However, if VTB’s chief executive, Andrey Kostin, concludes that Wildberries’s growth story is over and calls in its debt, the retail giant’s market share will be divided between rival Ozon and possibly Sber.

Russia’s ‘most resilient creatures’

Bakaleyko does not think Ukraine’s campaign against these warehouses will break the Russian economy. Small businesses survived the 1990s, COVID-19, and sanctions, he points out, and sellers will find alternatives if Wildberries collapses. Given this, he reasons that Kyiv’s real goal is to expose the callousness of Russia’s state institutions and show the public that their government can’t — or won’t — protect them.

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