So what is the Ukrainian leadership trying to do? We know they are targeting the Russian version of Amazon, there have been warehouses burning across the country, we have seen the smoke billowing into the air. This is something Putin and his Kremlin cronies cannot hide from the Russian population in Moscow and St Petersburg, the drone attacks are very visual, the Kremlin is in a degree of crisis now, this is evident.

The business concept is interesting, Tatyama Kim started the business in her apartment whilst on maternity leave in 2004. She was unable to buy clothes for herself when staying at home looking after her newborn. So, with her IT technician husband, they built the platform for the Russian eCommerce site. This was the largest taxpayer in Russia in 2022 prior to international sanctions, there is also the warehouse capacity loss that will affect that apparently the Russian military utilised.

The argument is Wildberries is supplying military gear to Russian soldiers on the frontline, there is probably some truth in that. There is body armour, tactical clothing, navigational equipment and drones being moved on this site. But the real reason is the Russian entrepreneurs who are being bankrupted, this is bringing the war home to ordinary Russians who have their entire business inventories tied up in Wildberries warehouses, they take the entire liability on here. Wildberry had a recent clause written into contracts where they would not be liable for force majeure that included drone strikes.

There is some discussion that Wildberries is the most indebted company in Russia, if the Ukrainians bring down this company they will bring down the Russian banks financing this company to create a domino effect in Russia. VTB Bank and Sberbank are most exposed with an estimated $10 billion to $14 billion debt. There are reports that Russians are withdrawing their funds from banks across Russia over fears the government will seize their money to fund the Ukraine war.

An estimated 80 to 100 million Russians are affected with $57 billion of goods traded on the platform, about 3% of Russian GDP. We are looking at mass bankruptcies in Russia with between 500,000 to 800,000 small and mid-sized sellers operating through the Wildberries platform. These entrepreneurs have had their entire inventories wiped out, this will have a knock on effect from the gig economy from drivers to warehouse staff, everyone is hurting now.