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Russian e-commerce faces crisis, platforms appeal to Kremlin for aid
🇵🇱 Poland /Economy & Trade

Russian e-commerce faces crisis, platforms appeal to Kremlin for aid

From Rzeczpospolita · () Polish

Translated from Polish, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Russian e-commerce platforms have requested federal subsidies from the government due to significant losses from Ukrainian drone attacks.
  • The Association of Digital Platforms (ACP) is seeking tax deferrals, penalty waivers, and compensation based on actual damages, estimated to be hundreds of billions of rubles.
  • The Kremlin is reportedly prioritizing funding the war, facing a growing budget deficit, and views the e-commerce crisis as a serious economic blow.

Russia's major e-commerce players are facing an existential crisis and have appealed to the government for financial aid. The Association of Digital Platforms (ACP), representing companies like Wildberries, Ozon, and Yandex, has formally asked Prime Minister Mikhail Mishustin for subsidies. These platforms have suffered extensive damage to their warehouses from Ukrainian drone attacks, leading to massive losses of goods.

The platforms have written to the Kremlin.

— WiedomostiHeadline of the article.

The ACP argues that government payouts should reflect the actual damages incurred and the scale of each affected company's operations. They are also requesting tax payment deferrals or installment plans for at least six months, along with a waiver of penalties during the period of disrupted operations. The total requested subsidy amount remains undisclosed but is estimated to be in the hundreds of billions of rubles.

The amount requested by the ACP has not been made public. It is estimated to be hundreds of billions of rubles.

— WiedomostiReporting on the financial scale of the requested aid.

Data suggests that fires at Wildberries warehouses alone resulted in losses between 445 and 507 billion rubles. The Association of Suppliers of Goods to Electronic Trade Platforms (APTEP) estimates seller losses even higher, between 600 and 700 billion rubles. Wildberries itself has absorbed significant direct losses, with its founder promising aid to sellers, though the company's own financial struggles limit its capacity to compensate them fully.

What happened to the platform that controls half of the e-commerce market in Russia is a 'serious blow to the economy.'

— Reuters sourceDescribing the economic impact of the e-commerce crisis.

Reports indicate that Wildberries has only compensated sellers with minimal amounts, covering less than 20% of their losses. Meanwhile, the Russian government, facing its own budget deficit exacerbated by the war, is reportedly unwilling to provide aid. The crisis is seen by some as a severe blow to Russia's economy, with predictions of a wave of bankruptcies due to the lack of available funds to support affected businesses.

There will be a wave of bankruptcies. Nobody has the money to support the sellers.

— Reuters sourcePredicting the consequences of the crisis.
DistantNews Editorial

Originally published by Rzeczpospolita in Polish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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