Economy
Why Ukraine is targeting Wildberries – and why it matters
The disruption at Wildberries that has been heavily targeted by Ukraine is sending shockwaves through Russia’s retail sector, affecting tens of thousands of small businesses that rely on the country’s leading e-commerce retailer to sell their products.
In the space of three weeks, Vasily Klimov’s online shopping pick-up point in Moscow has gone from a healthy small business to a loss-making operation he is now desperately trying to sell.
Klimov runs one of 98,000 pick-up points in Russia and neighboring countries where customers collect goods ordered through Wildberries.
But since July 18, when Ukraine began hitting Wildberries warehouses across Russia in a wave of near-nightly drone attacks, his business has taken a massive dive.
Attacks on at least 20 of the company’s sites have sparked major fires, destroyed entire warehouses of stock, and disrupted its vast logistics network across the world’s largest country.
A review of satellite imagery shows at least 1.18 million square metres of warehouse space – more than a fifth of the company’s capacity – has been damaged or destroyed, according to Reuters.
Wildberries, which reported yet another attack on Friday, says it is seeking partners to open new storage hubs.
“Sales have dropped by about 50% over the past month, and that is because there are almost no deliveries,” said Klimov, whose outlet operates under a Wildberries franchise agreement.
“The last month has been entirely loss-making.”
Warehouse attacks bring war’s costs to business
At least 13 people have been killed in the warehouse attacks. Ukraine, which has been defending itself against Russia since February 2022, denies targeting civilians and says the strikes are part of a campaign to “bring the war home” to ordinary Russians and raise the cost to Moscow of continuing the conflict.
Russia this week killed at least 17 people in attacks aimed at commercial warehouses in and around Kyiv that it alleged were being used to store drone components and other “dual-use” goods with military as well as civilian applications.
Ukraine says Wildberries, whose vast product range includes items such as night-vision goggles, ammunition pouches and helmets, alongside regular clothing, cosmetics and electronics, is supporting Russia’s war effort. The company and the Kremlin say it does not supply the army.
The sustained targeting of Wildberries is significant because the company, together with other e-commerce platforms, handles goods and services worth the equivalent of 8.5% of Russia’s economy.
Central bank governor Elvira Nabiullina said on July 24 that the bank would wait and see whether supply disruptions resulting from the attacks translated into higher inflation.
Elina Ribakova, an economist with the Kyiv School of Economics and the Peterson Institute for International Economics in Washington, said the attacks could complicate the central bank’s efforts to lower interest rates from their current level of 14%.
“Even though the Russian economy is likely to register zero growth this year, and it was in contraction for the first quarter, inflation is still running high and therefore any small shock could force the central bank either to slow down significantly the cuts or even stop the cuts, so supply side shocks are very important,” she said in a phone interview.
In late July, Russia’s largest lender, Sberbank, said it may increase loan-loss provisions after the drone attacks weakened the credit quality of online retailers and vendors, with about 300 companies seeking to restructure loans.
A source close to the Kremlin told Reuters that many small and medium-sized businesses with “absolutely nothing to do with the war” would suffer.
“There will be a wave of bankruptcies. No one has the kind of money needed to support sellers; we’re talking hundreds of billions of roubles. That’s a significant blow to the economy,” the source said.
The Kremlin said in July that discussions had taken place within the government about possible support for Wildberries. This could include loans from state-owned banks to the company or its sellers, as well as tax breaks or subsidies, sources said at the time.
For sale: Wildberries pick-up point – 1 ruble
According to Wildberries, 95% of orders are collected from pick-up points like Klimov’s. He said deliveries have fallen to around 150 parcels a day from 400 previously. When Reuters visited on Tuesday, no packages arrived.
“I simply do not have enough financial reserves to hold out,” he said, explaining his decision to put the business up for sale despite a lack of buyers. At one point, he jokingly offered to sell it to a Reuters reporter for 1 ruble.
Over 3,100 Wildberries franchised pick-up points were listed for sale across Russia on online marketplace Avito as of Wednesday.
Some businesses are hoping Wildberries will provide additional support. The company says it has increased discounts, granted payment deferrals and made initial voluntary compensation payments to more than 97,000 sellers who lost stock in the attacks.
Fashion brand Finn Flare lost products worth more than 100 million rubles ($1.24 million) in July when drones sparked a blaze at Wildberries’ Elektrostal warehouse east of Moscow, sending huge pillars of black smoke into the air.
“Since available inventory decreased, orders also fell,” the company’s e-commerce director Marina Drozhzhina told Reuters. “We plan to negotiate with Wildberries.”
Others are less optimistic. “I am not counting on compensation because I don’t want to be disappointed later,” said artisan toffee-maker Anna Starostina, who lost 170 boxes of handmade sweets in one of the first drone strikes on a Wildberries warehouse on July 18.
Türkiye is close to breaking into the ranks of the world’s top 10 defense exporters, as domestically developed platforms gain widespread international trust, a top official said Thursday.
Haluk Görgün, head of the Defense Industries Presidency (SSB), said the global success of Turkish defense platforms was driving demand, as he addressed an event marking the second anniversary of the National Competence Initiative in the capital Ankara.
The initiative is a strategic human capital transformation program launched to develop and sustain the technical, behavioral and leadership skills required across Türkiye’s defense and aerospace industry.
The SSB and affiliated companies have been hosting dozens of foreign delegations every week as an increasing number of countries seek to purchase Turkish defense products, Görgün said.
Türkiye’s defense exports hit $5.79 billion in the January-July period, an increase of 26.2% from a year earlier. Annualized sales reached $11.2 billion.
Shipments rose about 48% year-over-year in 2025 to a record of more than $10 billion.
Türkiye is currently the world’s 11th-largest defense exporter, Vice President Cevdet Yılmaz said, addressing the same event Thursday.
“Growth rates are looking very strong this year as well. God willing, we will set a new export record this year,” Yılmaz said.
“Our goal is to place our country among the top 10 exporting nations as soon as possible.”
In recent years, Türkiye has significantly ramped up its defense industry production.
It has injected billions of dollars to transform from a nation heavily reliant on equipment from abroad to one that is a major exporter and where homegrown systems now meet almost all of its defense industry needs.
For much of the past two decades, Ankara has expressed frustration over its Western allies’ failure to provide adequate defense systems against missile threats despite Türkiye being a major NATO member.
The country currently exports more than 230 defense systems to 185 countries.
Stressing technological independence, Görgün said, “Dependence on foreign sources for critical technologies amounts to a silent transfer of sovereignty.”
He noted that the sector’s global success was largely due to its human capital, noting that the average age of defense industry employees in Türkiye was 34, while some companies generating around $1 billion in revenue had an average employee age of under 30.
“Thanks to its young and skilled workforce, Türkiye is ready to meet the needs of its allies for decades to come,” said Görgün.
According to Yılmaz, having a skilled workforce capable of developing, producing and ensuring the sustainability of tomorrow’s technologies is what would help build on the achievements today, maintain technological superiority and prepare for the competitive environment of the future.
He noted that reducing dependence on foreign sources for critical technologies also requires reducing dependence on foreign sources for critical knowledge and skills.
“For this reason, we view the skills gap as a national security issue just as critical as the technology gap,” said Yılmaz, noting that there are approximately 120,000 employees in the defense industry.
Görgün emphasized that nations survive through the capacity they build long before crises emerge and said the National Competence Initiative represented the human resources and competency dimension of the country’s national resilience strategy.
“Many new fields became decisive in ensuring national security, ranging from artificial intelligence (AI) to quantum technologies, and from space exploration to cybersecurity,” he said.
“We’re determined to be one of the pioneers in this great technological race, since after all, foreign dependence for critical technologies could spell a silent transfer of sovereignty.”
Görgün said the initiative had reached around 500,000 people, bringing together seven target groups, ranging from high school students to industry executives, under a common development model comprising 11 programs.
“We reached 2,541 students over five semesters and included 7,000 vocational and technical high school students from 13 schools in 12 cities in our competency development initiatives, while implementing the Defense Industry Campus Program in eight cities with 3,000 participants,” he said.
“We conducted modules at universities, offering 288 courses to 4,991 students.”
He said career and competency meetings had also been held with a total of 111,000 people, while the Defense Career Platform brought together around 290,000 users and 339 companies.
The platform also delivered around 665 training sessions totaling more than 158,000 hours to over 73,000 users, he added.
Görgün said Erdoğan’s vision of full independence for the Turkish defense industry was “the strongest pillar” supporting the sector through strategic planning.
World food prices rose in July to their highest in more than three years as adverse weather and war escalation in the Gulf and Black Sea supported crop markets, the United Nations Food and Agriculture Organization (FAO) said on Friday.
The FAO Food Price Index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 131.1 points in July, up from 130.3 in June and the highest reading since January 2023.
The world faces another bout of food inflation as wars in Iran and Ukraine, along with El Nino, create a perfect storm of higher costs and lower crop yields, the FAO’s chief economist told Reuters this week.
A 3.4% month-over-month rise in the FAO’s cereal price index drove the July trend, fueled in turn by a 5.8% jump in wheat prices, the agency said.
Wheat markets were affected by concerns over Black Sea export disruptions and heat damage to crops in key producing regions, it said.
The FAO’s vegetable oil index rose 2% to its highest level since June 2022.
Higher crude oil prices amid escalation in the Iran war and strong demand for biodiesel supported palm and soy oil prices, though rapeseed and sunflower oil declined.
Sugar prices rose 5.6% on weather concerns in Europe and Asia and expectations of stronger ethanol demand in Brazil.
In contrast, meat prices fell 2.8% from a record high in June, FAO said.
Poultry, pig and bovine meat prices declined, though sheep meat prices reached a record high amid tight export supplies in Oceania. Dairy prices fell 0.7%.
The FAO’s overall food price index reading for July was slightly above a previous three-year high in April.
The latest reading was nonetheless 18.2% below its March 2022 peak that followed Russia’s full-scale invasion of Ukraine.
Türkiye’s top defense contractor Aselsan said Friday its newly developed Tolun P precision-guided bunker-busting munition successfully struck its target during a live-fire test.
The munition was launched from the Bayraktar Akıncı unmanned combat aerial vehicle to mark another milestone in the country’s domestically developed precision strike capabilities.
In a statement, Aselsan said the 250-pound-class guided munition demonstrated its effectiveness against fortified targets, including armored and reinforced concrete structures.
The company also released footage on social media showing the munition hitting its target with what it described as a direct impact.
Designed for hardened targets
Unlike conventional airdropped bombs, Tolun P is designed to maximize operational efficiency by allowing multiple munitions to be carried on a single platform.
Using Aselsan’s Sadak-4T Multiple Carriage Rack, platforms such as the Akıncı can carry several Tolun P munitions simultaneously. Electronic fuzes can be programmed by pilots from the cockpit shortly before release, enabling multiple strategic targets to be engaged in a single salvo.
Aselsan said Tolun P was specifically developed to strike hardened underground shelters, command centers and reinforced aircraft hangars.
Despite its relatively compact size, the munition combines a specially designed penetrating nose section with high kinetic energy, enabling it to penetrate up to 1 meter of reinforced concrete, according to the company.
The capability is intended to enhance the operational effectiveness and deterrence of Türkiye’s unmanned aerial systems while expanding the Turkish Air Force’s precision strike options.
Expanding Tolun family
Tolun P is one of several variants in Aselsan’s Tolun guided munition family.
Other versions include the Tolun L laser-guided munition, Tolun EW electronic warfare variant, Tolun F guided munition, Tolun IIR equipped with an infrared seeker, and Tolun S, a surface-launched version.
Aselsan said the expanding Tolun family is designed to provide a range of precision engagement options for different operational requirements.
Türkiye has launched a public awareness campaign highlighting the economic cost of terrorism over the past four decades, illustrating how the resources could otherwise have funded major investments in infrastructure, energy, health care and industry.
The campaign comes as the ruling Justice and Development Party (AK Party) filed a bill in Parliament to advance the two-year terror-free Türkiye initiative aimed at achieving peace by ending the conflict with the terrorist group PKK and its affiliated structures.
The initiative, launched across digital media platforms under the hashtag “National Solidarity,” said the fight against terrorism had cost Türkiye about $2.3 trillion over the past 40 years and suggests the potential investments that could have been made with those funds.
The campaign has been widely shared on social media, receiving support from Cabinet ministers, lawmakers and other political figures.
Alternative investment scenarios
According to the Directorate of Communications, the estimated cost could have financed renewable energy capacity sufficient to meet Türkiye’s electricity demand for 23 years through solar power or 17 years through wind energy.
The campaign also estimates the same amount could have funded the construction of:
1,888 Yavuz Sultan Selim Bridges (The third Bosporus bridge in Istanbul and one of the longest and widest of its kind in the world) 1,106 Osmangazi Bridges (A 2.6 km suspension bridge crossing the Gulf of Izmit that drastically cuts travel time between Istanbul and Izmir) 195 Northern Marmara Motorways (A major 400+ km express highway bypassing central Istanbul to carry intercity freight and transit) 218 Istanbul Airports (Türkiye’s massive main international aviation hub located on the European side of Istanbul) 1,504 Eurasia Tunnels (A 5.4 km double-deck undersea road tunnel connecting Istanbul’s European and Asian sides under the Bosporus)
Industry, healthcare, housing
The campaign also presents estimates of what the funds could have supported across other sectors.
According to the published infographics, the resources would have been sufficient to build:
15,000 organized industrial zones 2,000 automobile manufacturing plants 4,500 high-technology production facilities 7,500 defense industry manufacturing facilities
Industry and Technology Minister Mehmet Fatih Kacır said eliminating terrorism would create stronger conditions for investment, production and economic development.
“With a Terror-Free Türkiye, the path for investment, production and development will become much stronger,” Kacır said.
“Türkiye will write new economic success stories with the spirit of National Solidarity.”
The campaign also estimates the funds could have financed:
5,150 city hospitals More than 3.65 million family health centers Around 36.3 million social housing units More than 31.1 million earthquake-resistant homes 460,000 schools, each with 24 classrooms, totaling around 11 million classrooms 1,150 dams 66,500 firefighting helicopters or 32,000 firefighting aircraft
Security, economic development
In a statement accompanying the campaign, the Directorate of Communications said terrorism had targeted not only Türkiye’s security but also its economic development and social welfare.
“For years, the trillions of dollars allocated to combating terrorism prevented investments in our future, from energy and education to healthcare, transportation, industry and technology,” the statement said.
The statement also cited President Recep Tayyip Erdoğan’s remarks that achieving the goal of a Terror-Free Türkiye would benefit all 86 million citizens by supporting economic growth, development and national prosperity.
Financial markets already roiled by an Iran war-driven energy shock are facing another headache, as record temperatures across Europe are piling fresh pressure on food prices, supply chains and heavily indebted economies.
Here’s how extreme heat is becoming a key macroeconomic indicator for investors.
Supply chain squeeze
Investors’ supply chain worries have centred on the Strait of Hormuz and other trade routes disrupted by the Iran war. But Europe faces its own bottlenecks.
Major waterways, including the Rhine river, are suffering from exceptionally low water levels. Around 285 million metric tons of freight are transported on the Rhine each year, according to ING.
The river carried roughly 80% of goods moved on Germany’s inland waterways, connecting key industrial centres. Some cargo services have been suspended, while others are operating with reduced loads, pushing up transport costs.
Nomura senior European economist Andrzej Szczepaniak said he was monitoring water levels at Kaub, one of the shallowest points on the Rhine, on a daily basis.
Another inflation worry
The disruption risks adding to inflationary pressures.
Heat waves, droughts and wildfires across Europe are also hitting agriculture, raising concerns about food supplies and prices.
“We are definitely going to notice food price inflation,” said Invesco global market strategist Paul Jackson, citing the additional impact of the El Nino weather pattern, which is expected to intensify food inflation pressures globally.
If energy prices rise again, the impact could create a “double whammy” for central banks, Jackson said.
In Britain, major supermarket groups have warned another food-price shock could be on the horizon.
Growth hit
That leaves the European Central Bank (ECB) and the Bank of England (BoE) balancing inflation risks from extreme heat against the potential drag on economic growth.
Markets are pricing in at least one more ECB interest rate increase by the end of the year. A recent paper by the University of Mannheim and the ECB estimated that heat waves, droughts and floods reduced Europe’s economic output by 0.3% last summer. It projected cumulative losses could rise to 0.8% by 2029.
Persistently low water levels could further weigh on industrial production and growth.
“We’re at concerning levels (with the Rhine); however, we’re probably not at the stage where it could cause a drag on GDP,” said Nomura’s Szczepaniak, though he added that forecasts for continued dry weather in Germany remained a concern.
Catastrophic demand
One sign of how markets are adapting to climate risk is the rapid growth of catastrophe bonds, which transfer disaster risk from insurers and reinsurers to investors.
Investors receive regular payments but can lose part or all of their principal if a predefined event, such as a hurricane or earthquake, occurs. Morningstar estimates catastrophe bond funds now manage almost $38 billion in assets, up more than 70% from June 2023.
Europe, the world’s fastest-warming continent, has been ravaged by wildfires this summer, particularly in France and Spain. Morningstar said wildfires and floods account for a growing share of the risks covered as insurers seek protection against losses from those events. The trend creates new challenges for issuers and investors because catastrophe risks are difficult to model.
“A key question in the field is whether the frequency of natural disasters can still be reliably extrapolated from long historical data series, or whether new and unexpected patterns are beginning to emerge,” Morningstar said.
The weather market
Demand for weather derivatives linked to Europe has surged this year as businesses from ski resorts to utilities seek protection from heat waves, cold snaps, floods and droughts.
CME data show trading volumes in European-specific weather futures have risen nearly 30% in 2026, compared with little change in overall weather-related trading volumes, including U.S. and Japanese products.
Cool down
Record temperatures have also created winners.
Google Trends data shows searches for “aircon” have rocketed across Europe. Retailers including Currys and Carrefour have reported strong demand for fans and air-conditioning units during the hottest periods of the summer.
Italian appliance maker De’Longhi reported “significant double-digit” growth in cooling-product sales in its latest results, outpacing its core coffee business.
Europe remains a relatively under-penetrated air-conditioning market, offering growth opportunities for mainly Asian and U.S. manufacturers that dominate the sector.
The European Commission estimates the number of room air conditioners in the EU will exceed 100 million by 2030, up from 57 million in 2020 and fewer than 7 million in 1990. Demand has become significant enough that air-conditioning costs are now included in EU consumer price statistics.
Instagram and Facebook parent company Meta has been ordered by a New Mexico court to pay $567 million to address harms to young people from its platforms in the second phase of a landmark trial.
Judge Bryan Biedscheid said in a ruling late Thursday that the bulk of the money – $420 million – will be used for treatment services for young people. The rest will go toward awareness and prevention, screening services and other costs over the next five years.
The new penalty is in addition to the $375 million in civil penalties that jurors ordered against Meta in March after determining the company knowingly harmed children’s mental health and concealed what it knew about child sexual exploitation on its platforms.
In the second phase, prosecutors asked the judge to impose fundamental changes at Meta aimed at reining in addictive features, improving age verification and preventing child sexual exploitation through default privacy settings and closer oversight.
The total amount Meta is responsible for – $942 million – is a small fraction of its annual profit, which was about $60 billion in 2025. Investors seemed to shrug off the New Mexico ruling in after-hours trading Thursday, sending Meta’s stock down less than half a percent to $589.44.
Still, the ruling is another setback for Meta, which faces an avalanche of lawsuits from thousands of families of children harmed by social media.
New Mexico Attorney General Raul Torrez said it sends an unmistakable message that companies will be held accountable when their product designs knowingly put children at risk.
“Today’s decision is a victory for every parent who has worried about what social media is doing to their child and every child who deserves to grow up safer online,” he said in a statement.
Meta vowed to appeal.
“We work hard to keep people safe on our platforms and have been transparent about the challenges of identifying and removing bad actors and harmful content,” the company said in a statement. “We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts.”
The judge ordered Facebook and Instagram to build banner and informational screens to clearly explain its protection features, best practices and tools to address inappropriate comments, for example, and display them regularly. Those changes and an educational campaign in New Mexico would be subject to review by the state.
The court said federal children’s privacy laws prevent Meta from applying age-verification tools to children under 13. The Children’s Online Privacy Protection Act, or COPPA, means it cannot order Meta to request children to submit personal data or be passively tracked online, even for age verification purposes.
The court also noted that ordering verification of children’s ages only for Meta and not other social media companies would be “inequitable and unduly injurious” to the company.
Instead, the court ordered Meta to continue to improve its age assurance tools in New Mexico, which include using artificial intelligence to determine people’s age based on signals such as who their friends are and what types of content they post and consume. Meta must also attempt to develop a dedicated “under-13-years-of-age prediction model” in the next two years.
Additionally, Meta should also request proof of age for Instagram and Facebook users in New Mexico it estimates to be under 13. If it determines a user to be under 13, or under 18 but without being able to estimate a specific age, Meta must treat the user as under 13 or under 18 until the user verifies their age.
The company must also partner with schools or a child safety organization to create a reporting portal where school staff can flag users who may be under 13. And it must delete personal information it has collected on users under 13. The court also ordered Meta to report on its progress twice a year on how it’s complying with the abatement measures.
Meta is also gearing up for a trial later this month in federal court in Oakland, California. Here, Meta will face the first four of 29 states that sued it in a federal multi-district lawsuit filed in 2023 for contributing to the youth mental health crisis by knowingly designing features on Instagram and Facebook that addict children to its platforms.
Eight states, including Tennessee, where a trial is currently ongoing, filed lawsuits in their own state courts.
And late last month, Meta, along with TikTok, Snap and Google’s YouTube, were sued by the families of four teenagers who died by suicide over what they describe as “years of escalating harms” from using their platforms that eventually resulted in their deaths.
What comes out of New Mexico is the first of many dominoes that will fall for Meta, said Laura Edelson, an assistant professor at Northeastern University focusing on social media and cybersecurity.
“America is not going to pass a law that bans social media,” Edelson said. “But if companies like Meta know they’re causing harm to users by product design, the states are finally finding a way to rein this in.”
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