Ukraine has imposed sanctions on Russia’s biggest online retailer Wildberries and its founder Tatyana Bakalchuk, the richest woman in Russia, on July 23.
Tatyana Bakalchuk’s husband Vladislav was also included in the sanctions.
According to a decree signed by Ukraine’s President Volodymyr Zelensky, Wildberries, which rolled out its online store in Ukraine in September, is banned from doing business in the country for the next three years.
The sanctions also forbid Tatyana Bakalchuk, her husband Vladislav, and several department heads of Wildberries from doing business in Ukraine.
Two days before Zelensky signed the decree, Ukraine’s Minister of Culture and Information Oleksandr Tkachenko said that these sanctions are “another step aiming to clean Ukraine’s information space from Russian expansion.” He confirmed that Wildberries sold items considered to be Russian propaganda. The retailer also sold the uniform of Russian soldiers.
In September, Wildberries’ launch in Ukraine caused a backlash. The online store sold goods with the portrait of Russian President Vladimir Putin and Soviet symbols — which are prohibited in Ukraine.
Ukraine has previously sanctioned many Russian companies and citizens for posing a threat to national security. Russia’s biggest online retailers, including Ozon, Litres, Labyrinth.ru and Yandex are all blocked in Ukraine.
In 2017, Ukraine also blocked Mail.ru Group and two social media websites – VKontakte and Odnoklassniki.
As of July 26, Wildberries’ website in Ukraine is still online and accepting orders. Its subsidiary registered in 2014 in Kyiv hasn’t yet been dissolved, according to the YouControl database.
Wildberries’ website says that its goods are delivered in Ukraine by the postal service Meest, but the company told the Kyiv Post that it has already stopped shipments. Wildberries’ app is currently available on the Ukrainian Apple App Store but doesn’t work when installed.
Closing its business in Ukraine “is unpleasant, but not too noticeable” for Wildberries, according to Fedir Virin, partner at Russia’s analyst Data Insight. But according to Mikhail Burmistrov, the director of Infoline-Analytica, another Russian analyst, “the sanctions won’t affect the logistics of the company and the development of its international business.”
The share of Wildberries’ international sales in its revenue structure is less than 5%. Apart from Ukraine, the company operates in seven countries: Russia, Poland, Slovakia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.
As of today, Wildberries employs 32,000 people worldwide. In 2020, Wildberries became the largest retail company in Russia valued at $14 billion. A year prior, the company’s revenue was $3 billion. Its website is visited by 7 million users daily.
Bakalchuk founded the company in 2004. She is now the richest woman in Russia and the 13th richest person in the country with a fortune of $13 billion, according to Forbes Russia.
To compare, Ukraine’s biggest online retailer Rozetka employs 4,000 people. In 2020, the company’s revenue amounted to $666 million, while net profit exceeded $4 million. Nearly 41 million people visited its website in August.
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