Why is Ukraine attacking Wildberries, the Russian version of Amazon, selling everything from groceries to drones?

A warehouse of Wildberries in the western Russian city of Penza was set ablaze on Thursday by an Ukraine's drone attack, making it the latest in a series of strikes carried out by Kyiv’s forces targeting the Russian online retailer.

According to Regional Governor Oleg Melnichenko, the drone attack left one person injured and about 200 people evacuated from the site.

Wildberries acknowledged the attack in a post on Telegram and said it has redirected its supply chains after the Penza attack.

"Logistics chains have been reorganised; the receipt of goods and the dispatch of orders are being carried out at other sites," Wildberries said in a statement.

Another Wildberries warehouse was hit by a Ukrainian drone in Sarapul, about 1,100 km (685 miles) east of Moscow, and a fire broke out, according to the company.

Staff were evacuated and "according to preliminary information, no one was injured," Wildberries said in a separate statement.

After oil facilities, Ukraine hits online retailer's warehouses

Over the past few weeks, Wildberries, the country’s largest online retailer, often referred to as Russia’s Amazon, has become the latest target of Ukrainian drone attacks.

Ukraine first targeted Wildberries warehouses on July 18-19 in the Tambov region about 480 km southeast of the Russian capital, as well as in the Moscow region, resulting in eight casualties and destroying facilities.

Since then, Ukraine has launched attacks on a number of the company's warehouses around the country.

What is Wildberries?

Founded in 2004 by Tatyana Kim, a Russian woman of Korean ethnicity, Wildberries acts as an online marketplace and logistics provider. It hosts millions of third-party sellers and sells almost everything, from electronics to groceries.

Beyond Russia, Wildberries also has operations in Belarus, Kazakhstan, Uzbekistan, Tajikistan, Armenia, Kyrgyzstan, and Georgia.

Until now, Ukraine had focused its drone attacks in Russia on Moscow’s oil infrastructure, including refineries and vessels. But the string of attacks on Wildberries, a privately held online marketplace, which at the outset has no strategic value, has puzzled many observers.

Why is Wildberries being targeted?

But according to Ukraine, the strikes have a military purpose. According to Ukrainian authorities, Wildberries is playing a role in the ongoing war. They have pointed out the sale of dual-use hardware, including consumer drone components, navigation equipment, body armor, and helmets utilized by Russian military personnel on Wildberries.

Some have also argued that the strikes on Wildberries have a much larger impact than the disruption of a distribution network. According to Denys Shtilerman, the founder of Fire Point, a Ukrainian defence technology company, Wildberries is the largest borrower in Russia, and its demise would lead to the collapse of a large number of banks in the country.

An industry source told Reuters that Wildberries was in a difficult situation and might have to seek government support, most likely through state-controlled banks, in order to maintain operations.

On the receiving end of the Ukrainian drone strikes, Wildberries had earlier this month updated its vendor partnership agreement. According to The Moscow Times, the updated vendor partnership agreement of Wildberries classifies drone strikes, missile attacks, and civil unrest as force majeure events. This, according to the company, absolves the online platform from financial liability to compensate third-party merchants for inventory lost or destroyed in its warehouses during such events.

This also means that millions of sellers, including those who have their entire inventory stored in Wildberries, are facing financial ruin in case of a Ukrainian drone strike.