Ukrainian drone strikes on the warehouses of Russia's biggest online marketplaces will cost the country's e-commerce 400 million orders and 400 billion rubles ($4.8 billion) in revenue this year, the research firm Data Insight estimates, The Moscow Times reported. It prices what the campaign has done to a whole consumer market, not only to the companies whose warehouses burned. Sellers are cutting back on the platform at the center of it, and Wildberries' payout delays are pushing some of them out.
The forecast, cut by a fifth
Data Insight lowered its growth forecast for Russian online retail by 20%, founder Fyodor Virin said. The market will now grow to 9.6 billion orders this year instead of 10 billion, and to 15 trillion rubles ($178 billion) in sales instead of 15.4 trillion.
That is exclusively the effect of the Ukrainian strikes on marketplace warehouses, Virin said, and most of the loss falls on Wildberries. The bombardment of the depots cut sales because goods were unavailable in a given city or entirely, and because delivery times grew as parcels had to travel further.
All of it lands in the second half of the year. Strikes on Wildberries warehouses began on 18 July and on Ozon's on 25 August, according to Virin. Euromaidan Press reported the first strike on an Ozon warehouse on 22 August.
About 30% of the orders that got stuck or disappeared from sale were cancelled outright, Virin estimates. The rest of the unmet demand went mostly to other online platforms and, to a lesser degree, to physical retail. Payout delays that began in mid-August have pushed some sellers to pull their stock, and Wildberries blamed the first missed round on a DDoS attack.
A warehouse built to hold up to 54 million items burned down in Tambov Oblast, Russia
What the companies lost
Damage to RWB, the company that runs Wildberries, from the loss of warehouses and infrastructure may reach 147 to 280 billion rubles ($1.7–3.3 billion), while sellers have provisionally lost 445 to 507 billion rubles ($5.3–6 billion), Data Insight's lead analyst Sergei Semko estimated. All of the marketplace's key logistics complexes have been hit, and it could lose a fifth of its network and over half its main hubs at once.
Much of what the sellers lost will not come back. On 22 July, Wildberries' founder said the warehouses were insured but that standard policies do not cover drone-strike risk, and Ozon has told sellers that losses from military action are an entrepreneurial risk neither it nor insurers will compensate.
Total losses for Ozon and its sellers are far lower, at around 100 billion rubles ($1.2 billion). Ozon has a much more branched warehouse network and rents most of its large complexes, Alfa-Bank analysts said. Its shares still fell as much as 29% in a single August session on a day when the Moscow exchange lost 2.9%.
