Wildberries May Need Up to 1.3 Trillion Rubles for Recovery

Russia’s largest marketplace Wildberries may need up to 1.3 trillion rubles in additional financing after a series of strikes on its logistics centers. This estimate was given by two sources in the e-commerce market to The Bell.

According to one of the publication’s interlocutors, the company’s direct losses could exceed 100 billion rubles, and in an unfavorable scenario could reach 200 billion rubles. Wildberries has lost about 20% of its warehouse capacity in a few weeks, sources say.

To restore its logistics network and rebuild the business, the marketplace, according to their estimates, will have to significantly increase its debt load. The company’s total financing needs could amount to 1.3 trillion rubles. This is a forecast by market participants, not a confirmed plan by Wildberries or the Russian authorities.

The marketplace’s turnover may have shrunk by about a quarter after the strikes. The Bell’s sources attribute the decline not only to the shutdown of some warehouses, but also to the departure of sellers who lost goods and faced delivery disruptions.

The drop in sales creates an additional problem with working capital for the company. Wildberries receives payment from buyers immediately, but transfers money to sellers after several weeks. When turnover grows, this time gap helps finance current expenses, but when sales fall, there is less free cash.

One source suggests that after the loss of warehouses, the marketplace could remain unprofitable for several years. The company itself has not published estimates of the total damage or financing needed.

The Russian government is discussing possible support measures for Wildberries and sellers working on the platform, but no final decisions have been made yet. Among the options considered are tax and credit incentives, as well as the use of Russian Post facilities for temporary storage of goods. The Kremlin previously confirmed that aid was being discussed, noting that a specific mechanism had not yet been approved.

Wildberries has already granted some affected sellers credit deferrals, discounts on storage and transit deliveries. The company stated that the final amount of compensation could be determined after damage assessment.

Based on materials from: The Moscow Times, The Bell