On August 4, Kazakhstani Minister for Trade and Integration Arman Shakkaliyev announced that the Russian e-commerce platform Wildberries would expand its warehouse capacity in the country. According to the minister, Wildberries plans to build 260,000 square meters of storage, split between Astana and Almaty, expanding its capacity more than eightfold from its current 46,000 square meters of leased warehouse space.
The announcement comes following a July marked by more than 20 attacks on Wildberries’ logistical hubs across Russia, also affecting Kazakh sellers on the platform who have lost an estimated $3.2 million worth of goods.
Despite media reports framing the expansion as a relocation of the e-commerce platform, the planned warehouses in Kazakhstan would not be able to cover the more than 1 million square meters lost over the last month. On top of this, Wildberries’ new warehouses planned in Kazakhstan are, at the time of writing, only set to be completed in 2027, thereby not solving the current problems facing the company. This news, however, came just days after the Russian newspaper cited multiple sources saying the company was looking for 100,000 square meters of extra storage.
Wildberries’ overall aim to build more warehouses in Kazakhstan is not new. In fact, such an effort announced at the beginning of 2023, with plans to open two years later before the project was postponed. The company’s market share in Kazakhstan has grown, now making it a distant second with almost 27 percent of the e-commerce market. Locally founded Kaspi keeps almost two-thirds of the market.
Wildberries is reportedly scrambling to find an additional 100,000 square meters of warehouse space as a result of the last month’s many attacks. Reports of this new search for space came as it became clear that losses at Wildberries hubs in Russia could amount to upward of $3.37 billion.
With losses from Kazakh vendors alone exceeding $3 million, Shakkaliyev, during the announcement of Wildberries’ construction plan, urged Kazakh citizens to use local e-commerce platforms like Kaspi rather than foreign alternatives, both for selling and buying goods.
“We must use our domestic marketplaces. We call this economic patriotism. We currently have a very high share of domestic marketplaces, so, of course, we should try to order locally,” the minister said, stating that only through these channels could people be guaranteed that their products were delivered.
This statement is just one sign that the role of Wildberries in Kazakhstan, and Central Asia in general, could be challenged by the recent attacks. Even before this advice was given, Kyrgyz clothing manufacturers showed interest in replacing Wildberries with Kazakh platforms, both due to financial interest and the protection of the stored inventory.
Likewise, Kazakh sellers have taken into consideration using local platforms from either Kazakhstan or a larger market like Uzbekistan. A central issue for some of the sellers was, however, access to the much larger Russian market.
New warehouses could become key for Wildberries going forward for reasons beyond keeping its market share. According to a Kommersant report, for example, expansion of the e-commerce company’s Kazakh operations was linked to wishes of protecting some of its goods, rather than just local expansion. By constructing warehouses in Kazakhstan and neighboring Uzbekistan, Wildberries could safeguard parts of its inventory and some of the losses it has taken over the past month.
Similar measures were taken in early August by competing Russian e-commerce platform OZON, which focused on moving expensive goods away from more easily targetable logistical hubs.
While the future opening of new logistical hubs might increase Wildberries’ importance in Kazakhstan, it does not seem likely to safeguard the company as a whole. Instead, what will be relevant is what the Russian e-commerce heavyweight decides to put in these new Central Asian warehouses and what the state of the company will be at that time.
Discussion about this post