Ukrainian drone attacks disrupt Russia's consumer economy

Ukraine has expanded its long-range drone campaign inside Russia by repeatedly targeting Wildberries, the country’s largest online retailer, disrupting a logistics network used by millions of consumers and hundreds of thousands of businesses.

The latest reported attack took place overnight on Tuesday (August 18) during a large-scale Ukrainian drone assault on Moscow and the surrounding region. The Russian Defense Ministry claimed that air defenses shot down 791 drones across 13 regions, including at least 197 over Moscow Oblast. Russian state media Moscow 24 reported that another Wildberries warehouse outside Moscow was damaged, although the full extent of the destruction was not immediately clear.

The campaign against Wildberries began on July 18, when warehouses in Elektrostal, east of Moscow, and the Tambov region were targeted. In the following weeks, strikes hit facilities across Russia, including in Tver, Salavat and Podolsk, as well as Yekaterinburg, more than 2,000 kilometres from Ukraine’s border. Around 20 Wildberries logistics hubs have reportedly come under attack.

On August 16, Ukraine struck Wildberries’ largest warehouse in Moscow Oblast, covering approximately 250,000 square metres. Ukraine’s Defence Ministry said seven of the company’s 10 largest logistics centres had been knocked out of operation. Some warehouses are as large as 300,000 square metres, and a fire at the Elektrostal facility reportedly took three days to extinguish.

The attacks have caused substantial losses. Moscow-based consultancy Data Insight estimated that Wildberries had lost goods worth up to 480 billion rubles, or approximately $5.7 billion, and around one-third of its warehouse space. Combined losses to the company and its sellers were estimated at up to 800 billion rubles, or $9.5 billion. At least nine employees have reportedly been killed and scores injured.

Kyiv maintains that the warehouses contribute to Russia’s war effort. President Volodymyr Zelenskyy said they were part of a logistics system used to distribute navigation systems, drone components and other supplies for the Russian military. Mykhailo Podolyak, an adviser to Zelenskyy, said the attacks were also intended to affect Wildberries’ creditors – such as VTB and Sberbank – and disrupt the wider Russian economy. The company now faces significant financial pressure with its estimated to be between $14 billion and $15 billion. Sberbank Chief Financial Officer Taras Skvortsov acknowledged that the attacks had damaged Wildberries’ credit quality and reduced its potential future cash flow. 

Moscow meanwhile rejects the claim that Wildberries serves a military function. However, the platform lists military and dual-use products, including drone components and body armour.

The consequences have also extended to Russia’s broader consumer economy. Wildberries controls roughly half of the country’s e-commerce market and connects an estimated 500,000 to 800,000 sellers with consumers across Russia. Many sellers have lost inventory, while owners of pickup points have reported falling revenues as deliveries decline.

As attacks continue, Wildberries has begun reorganising its supply chains and developing smaller “partner hubs,” while CEO Tatyana Kim has offered affected sellers discounted storage, free transfers of goods and discounted loans. The repeated strikes, however, have exposed the vulnerability of a retail network built around a relatively small number of massive logistics centres.

Source: commonspace.eu with AP News (New York), Deutsche Welle (Bonn) and Kyiv Independent (Kyiv).

 

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