SerpApi.Org
For four years, the Kremlin sought to shield Russians from the fallout of the war in Ukraine, maintaining a veneer of normality in everyday life and ensuring that affluent city dwellers could still enjoy the conveniences of a 21st-century economy.
That effort is now crumbling.
Ukraine’s long-range drone strikes have brought the war home to Russia’s urban middle class, most recently with attacks on logistics hubs for the country’s biggest e-commerce company, a homegrown version of Amazon.com.
The company, called Wildberries, is deeply embedded in daily Russian life, with 81 million users a month, according to its website. Hundreds of thousands of third-party vendors use its online bazaar as a storefront, selling everything from clothing to housewares to Sony PlayStations.
On Saturday, Ukrainian drones struck two of the company’s facilities, including a vast complex outside Moscow that was incinerated in a fire that took more than two days to extinguish. Two more Wildberries sites in southern Russia were hit overnight Tuesday to Wednesday.
At least nine people were killed in the attacks, and total costs could range between $3 billion and $4.4 billion, according to Data Insight, a Moscow-based research firm. Most of that is due to the destruction of goods belonging to vendors, rather than Wildberries’ buildings themselves.
Some vendors on social media expressed shock that their inventories had been torched. Viktoria Terekhova, who sells playfully designed clothing for babies and toddlers under the brand Fareal, broke into tears in a video posted to Instagram as she spoke of the victims of the attacks and the daunting task of keeping her business afloat.
In total, around half her inventory was destroyed in the strikes on the warehouses near Moscow and in southern Russia, costing more than $160,000. Terekhova said in an interview that the attacks have put her business at risk of defaulting on its loans. “If these strikes continue, we’ll have nothing left,” she said.
Many of the vendors have voiced anger at Wildberries, which they worry won’t compensate them for their losses. Less than two weeks before the attacks, the company amended its agreement with vendors to absolve itself of liability in the event of drone strikes.
Wildberries didn’t respond to a request for comment.
Tatyana Kim, its founder, has promised to help vendors and said Wednesday that the company had begun making payments to smaller vendors whose stock was destroyed in the attack near Moscow. She said Wildberries’ insurance policy didn’t cover drone attacks.
The strikes have prompted debate over whether Wildberries’ warehouses are a legitimate military target. Ukrainian President Volodymyr Zelensky justified the attacks by saying the logistical hubs hit by Kyiv help supply the Russian military with drone components, navigation equipment and other gear. A review of Wildberries website shows drones and body armor for sale, but the overwhelming majority of its offerings are civilian in nature.
Russia has frequently bombarded civilian infrastructure in Ukraine with missiles and drones. After the weekend strikes on Wildberries warehouses, Russia hit back by attacking logistics centers used by Nova Poshta, a sort of Ukrainian version of FedEx.
Even before the attacks on e-commerce warehouses, Russians were voicing frustration about widespread fuel shortages, the result of a monthslong campaign of Ukrainian drone attacks on refineries.
So far in July, more than half of Russian refining capacity has been knocked offline by the attacks, according to estimates from IIR Energy, a Texas-based energy-market data and intelligence firm. The shortages have forced Russia to import gasoline for the first time in years, while drivers have been stuck waiting for hours in huge lines at gas stations.
“The fuel crisis is arguably the most visible shock for ordinary citizens since the mobilization of new troops in September 2022,” Oxford Economics said in a research note this week.
By many measures, Russia’s economy was a success story in the wake of Vladimir Putin’s full-scale invasion of Ukraine in 2022.
Hit with sanctions, Russia reoriented its trade around China and other non-Western countries. Popular goods from Western brands that exited Russia after the invasion, such as Apple iPhones, continued to be on sale, brought in by unofficial resellers in places like Dubai and Hong Kong. Oil revenues kept pouring in to fund the war effort. Military spending juiced economic growth in 2023 and 2024, though it has since slowed.
Now, rising fuel prices have stoked inflation, forcing Russia’s Central Bank to slow down its pace of interest-rate cuts, a disappointing shift for local investors and businesses.
Moscow’s main stock index has lost nearly one-quarter of its value so far this year, and last week sank to its lowest level since October 2022. After a selloff in government bonds, the Russian Finance Ministry said this week it was halting new sales “to aid with stabilizing the market situation.”
Between March and May, a record-high 60% of Russians told Gallup that their local economic conditions were getting worse, the first time that a majority of respondents had been negative since the pollster began asking the question in 2006.
Putin has shown no inclination to scale back his military ambitions in Ukraine in response to the worsening economic picture. On Wednesday, he dismissed the fuel crisis as “temporary” in a televised meeting with the government’s top economic policymakers. Earlier, the Kremlin’s top spokesman condemned the strikes on Wildberries warehouses and said the authorities were in contact with the company.
Maxim Mironov, a finance professor at IE Business School in Madrid and critic of the war in Ukraine, said that Ukraine’s drone attacks would ultimately have only a small negative impact on Russia’s economy, but their psychological effect was already meaningful.
“For years Putin has been selling the story that the fighting is somewhere on the fringes of the empire, it’s a special military operation, and everything is normal,” he said.
“Now, people have begun to feel it, because of the lines at gas stations, because of the fires…Everyone in Russia sees the war from their own window.”
Write to Alexander Osipovich at [email protected]
