Wildberries sellers face wave of bankruptcies, Reuters source says
Photo: fire at a Wildberries warehouse in Russia (Screenshot)
Russia does not have sufficient funds to rescue sellers affected by Ukrainian attacks on the warehouses of the Wildberries marketplace. What has happened to the marketplace, which controls half of the country's e-commerce market, is a serious blow to the economy, according to Reuters.
According to a Kremlin-linked source cited by the agency, a wave of bankruptcies is expected.
"No one has the kind of money needed to support sellers; we're talking hundreds of billions of roubles," the source said.
The problem is compounded by the fact that a significant portion of Wildberries sellers are individual entrepreneurs. Under Russian law, they are personally liable for debts with their own property.
In other words, those who lost their goods through no fault of their own, and who have outstanding loans, could lose everything or a substantial portion of their assets. The Chamber of Commerce and Industry has proposed that the government amend the bankruptcy procedure to prevent such a situation.
Russian authorities are discussing a support package for sellers, though it does not include direct payments to those affected. Options under consideration include loan repayment holidays, preferential loans, and tax breaks. However, it remains unclear how quickly the state can assist sellers who are already facing urgent debt repayments.
Context of the news
At least 20 Wildberries logistics hubs have been hit by Ukrainian drone strikes, with some completely destroyed by fire. As a result, the company has lost 1.18 million square meters of warehouse capacity.
Among the most recent attacks, a Wildberries warehouse in Yekaterinburg was struck — a city located more than 1,700 kilometers from the Ukrainian border.
The impact of the strikes on Wildberries is already being felt at various levels of Russia's economy. According to estimates, the cost of rebuilding the company's facilities could amount to a quarter of Russia's annual budget deficit, and the marketplace's turnover has already dropped by a quarter due to an exodus of sellers.
