Ukraine launched a new massive attack on Monday against the heart of Russian commerce. After destroying two warehouses of the distribution giant Ozon over the weekend, its drones struck four more hangars in the south of the country. The Ukrainian forces thus extend their campaign of punishment against key economic infrastructures, after having razed at least 12 logistics centers of their rival platform, Wildberries, a sort of Russian Amazon that has been pushed to the brink of bankruptcy.
In recent hours, a drone hit an Ozon warehouse in the city of Enem, in the Krasnodar province, a border region with Ukraine and the Black Sea, causing a “large-scale” fire, according to the company. Another bombing set fire to another facility and injured several people in Makhachkala, in the Caucasian republic of Dagestan.
“All security systems operated normally and we quickly evacuated the workers. Their lives are not in danger,” the company specifies. However, debris from a downed drone fell on a private children’s center. According to Russian authorities, three children died and six other minors and two adults were injured.
The Ukrainian armed forces also attacked two other warehouses on Monday in Adygea and Nevinnomyssk, on the Black Sea coast, but did not reach their targets. “There were no injuries and the warehouses and the goods inside are safe,” Ozon states.
The big question is who will take responsibility for the huge losses suffered by the retailers who stored their products in the warehouses. In the case of Ozon, company sources explain that this issue will be addressed later. For now, the company has committed to refund final customers for orders that were already in progress and affected by the fires.
“The Russian government is considering various support options for businesses and is monitoring the situation around online commerce,” said Vladimir Putin’s spokesperson, Dmitry Peskov, on Monday.
The Ministry of Finance has announced that entrepreneurs will be able to delay VAT and corporate tax payments for one year if their losses exceed 5% of their annual income. It will also suspend tax audits on these companies this year.
The losses suffered by the Russian e-market are substantial. According to estimates by the consulting firm Data Insight cited by Bloomberg, the damages suffered by Wildberries alone between July and August would amount to around one trillion rubles, about 10 billion euros.
Ozon, which operates 47 logistics centers across the country, prepared for a possible attack during this time and distributed some of the most valuable goods to final pickup points. Even so, the group’s shares plunged nearly 30% this Monday at the opening of the Moscow Stock Exchange.
Monday’s bombings add to the destruction of another Ozon warehouse this Sunday in Orenburg (on the border with Kazakhstan, more than 1,500 kilometers east of Ukraine) and another in Samara (on the banks of the Volga), on Saturday. That was the first attack on a logistics center of the company since the war in Ukraine began.
Concern and chaos
The Russian giant has not been the only major distributor to face a possible bombing of its facilities. Some large supermarket chains, such as Magnit and X5, have asked their distributors to deliver their products directly to their stores, while other companies have included additional clauses in their contracts exempting them from any liability in case their facilities catch fire.
Putin said this weekend that Ukraine “has opened Pandora’s box” with its actions against Russian logistics. Meanwhile, among entrepreneurs there is growing concern about the impact this campaign may have on Russian consumption, which is already immersed in a severe crisis due to the huge diversion of resources to the war.
Putin promised last week that Wildberries’ facilities will be rebuilt, but did not specify whether he will also rescue the retail companies. This distribution giant belongs to Tatiana Kim, a businesswoman close to the Kremlin and the richest woman in Russia. During her divorce, she fought for ownership of the company with her ex-husband Vladislav Bakalchuk, who is in turn an ally of the Chechen president, Ramzan Kadyrov. The conflict escalated to a shooting with two dead in Moscow before the Kremlin granted control of Wildberries to Kim.
The bombings have caused chaos in the logistics of these companies and their customers. Ozon has canceled all shipments to the destroyed warehouses and has urged sellers to direct their products to other facilities, although it is unclear if these will be the next Ukrainian target.
“We will remove from the sales platform the products stored in the affected warehouse,” Ozon explained in a statement. “Orders already placed from this warehouse will be canceled and customers will receive refunds. If a user sees that their request has been canceled in their personal account, they can place it again immediately. If it is not canceled, it will be shipped from other warehouses,” it adds.
