Massive Fire at Russian E-Commerce Warehouse Raises Questions
A blaze engulfed a warehouse near St. Petersburg, Russia on Saturday morning, leveling about 540,000 square feet of space owned by one of the country’s most prominent e-commerce retailers.
Wildberries, a multi-category marketplace known throughout the country as Russia’s answer to Amazon, said none of its employees were hurt in the incident. Russia’s Ministry of Emergency Situations said about 300 firefighters and dozens of fire trucks, along with helicopters, were deployed to the site in the suburb of Shushary and succeeded in containing the blaze. The Ministry rated the fire a category five, the most serious of emergencies. Videos posted on social media and by news outlets show plumes of smoke billowing from the wreckage as crews scrambled to contain the flames.
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State news agency TASS reported that officials said Wildberries obtained permission to construct the 750,000 square foot warehouse, but did not have permission to operate it. The outlet reported that smoke detectors had been turned off before the fire, as there had been several false alarms, but Wildberries said it was fully compliant with regulations and safety requirements.
Wildberries is owned by the country’s richest woman, Tatyana Bakalchuk, who founded it in 2004 with her husband Vladislav Bakalchuk. The platform, which trades in apparel, beauty, personal care products, home goods and electronics, fulfilled about 9 percent of its orders from the St. Petersburg warehouse, state-run news agency RIA Novosti reported.
On Monday, Wildberries released a statement saying it would have new facilities for a sortation center operational in St. Petersburg within two weeks. “This will help to quickly return to normal work and organize the supply of goods,” the company said. “The new center will help reduce the load on the existing Utkina Zavod warehouse, and from there the products will be moved to other warehouses for sorting and delivery to customers.”
On its Telegram channel, the group also said it would begin the first payouts to sellers whose products were destroyed during the fire. The amount of compensation will be calculated as if the products were sold, it explained.
The fire took place just days after a fight broke out between workers at the warehouse, Russian news site RBC wrote. A source in the Ministry told the outlet that arson is being investigated. Newsweek reported that 939 industrial fires took place in Russia in 2023—a jump of more than 125 percent from the 416 incidents the year prior, citing open-source intelligence platform Molfar.
Anton Gerashchenko, former Deputy Minister of Internal Affairs of Ukraine, tweeted that the fire is the latest of at least 50 similar and unresolved incidents that have taken place at Russian warehouses in St. Petersburg and Moscow over the past five to six months. Russia has fingered Ukrainian adversaries as arsonists after previous events, but “Russian law enforcers were doing raids on these warehouses, looking for migrants who are detaining from serving in the Russian army” just days before the Wildberries fire, he said.
“There have been rumors that with the sanctions it is more profitable to burn down the building and get payments from insurance than upkeep half-empty spaces,” he added. Under the threat of increased sanctions from the U.S., China’s state-owned financial institutions have pulled back on funding for Russian clients.
On Tuesday, Bloomberg reported that at least two Chinese banks ordered reviews of Russian businesses in order to cut ties with those on the U.S. sanction list. In December, President Joe Biden issued an executive order authorizing U.S. sanctions on foreign financial institutions that support Russia’s military-industrial base through transactions or services.
