Ukraine targets Ozon in widening attacks on Russian online retailers
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A screengrab shows flames rising from an Ozon facility following a Ukrainian drone strike, in Makhachkala, Dagestan, Russia.
PHOTO: SOCIAL MEDIA VIA REUTERS
- Ukraine has expanded drone attacks to target four logistics hubs of Russia’s second-largest online retailer, Ozon, disrupting operations and injuring several people.
- Ozon’s shares dropped nearly 30% after the strikes, which add to earlier attacks on rival Wildberries, aiming to hurt Russia’s wartime economy.
- Russia plans state support and tax breaks for affected e-commerce firms, while sanctions and financial pressures challenge Ozon’s recovery and investor confidence.
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MOSCOW - Ukraine has targeted four logistics hubs owned by Russia’s second-largest online retailer Ozon, widening a campaign of drone strikes on Russian e-commerce companies intended to inflict more damage on the war-battered economy.
Ozon’s shares tumbled on Aug 24 after it reported the strikes in southern Russia, which brought to six the number of its facilities targeted in the last three days.
Kyiv had until last week focused on Ozon’s rival, Wildberries, in attacks on the e-commerce sector - one of the fastest-growing parts of the Russian economy, which is otherwise close to stagnation after four and a half years of war in Ukraine.
Ozon said in a statement that a logistics hub in Makhachkala in Dagestan was on fire and had halted operations after a drone attack, adding: “According to preliminary information, several people were injured.”
A fire also broke out at an Ozon logistics hub in the town of Enem on the outskirts of the city of Krasnodar, and workers were evacuated from warehouses in Adygeysk, in the Adygeya region, and in Nevinnomyssk in the Stavropol region although neither facility was damaged, it said.
Work at an Ozon logistics centre in the Samara region was halted on Aug 22 after it was hit in a drone strike, and the company said work had been halted at its logistics centre in the Orenburg region, from which over 300 people were evacuated.
Shares in Ozon fell by almost 30 per cent on the Moscow Exchange on Aug 24 and shares in its major shareholder, private equity firm AFK Sistema, fell over 13 per cent.
Ozon shares had risen nearly 300 per cent since the market turmoil that followed the start of the war in Ukraine in 2022, making Ozon one of Russia’s best-performing stocks until the attacks.
Kyiv has been attacking Wildberries warehouses on the grounds that they are part of the infrastructure underpinning Russia’s war in Ukraine.
The strikes are part of a wider campaign to disrupt Russia’s economic infrastructure, choke off war financing and bring the realities of the conflict home to ordinary Russians, as Moscow continues to pound cities and infrastructure across Ukraine.
As part of the campaign, attacks on Russian oil refineries have caused fuel shortages and forced motorists in Moscow to queue for hours for petrol.
Financial analysts said that unlike privately owned Wildberries, which has the backing of its partner, state-owned bank VTB, Ozon’s main shareholder AFK Sistema has a large debt and is unlikely to provide substantial support for the retailer.
In remarks before the latest attacks on Ozon, Russian President Vladimir Putin promised state help in the restoration of warehouses “at a new technological level” and asked the government to design a special programme to help the sector.
The Finance Ministry said on Aug 24 it had prepared measures to support Wildberries and small businesses operating on its platform whose goods have been damaged in attacks. The measures included tax breaks for up to one year.
Russia’s central bank has also advised creditors to support businesses affected by attacks on logistics centres and warehouses.
“We keep on working,” said Wildberries owner Tatyana Kim, Russia’s richest businesswoman, welcoming the tax breaks. Neither the ministry nor the company disclosed the value of the support package.
Ozon, which grew from an online bookstore, was once a favourite among foreign investors and had its depositary receipts listed on Nasdaq until 2023. The company raised US$1 billion in an initial public offering in 2020. It is now listed on the Moscow Exchange.
Before the war, international investors included US-based BlackRock, which said it held no Ozon shares in 2023.
Ozon does not disclose the names of its investors, but Norway’s sovereign wealth fund, the world’s largest, reported ownership of 0.23 per cent of shares in Ozon as well as over 1 per cent of shares in Sistema last June.
The European Union imposed sanctions on Ozon and Wildberries’ financial units on July 24. Ozon said its unit does not operate outside Russia and does not have any assets, which could be hit by Western sanctions. REUTERS
