THE BELL WEEKLY: Primetime scandal at Russia’s Amazon

Hello! This week we look at an eye-popping scandal at Wildberries — Russia’s answer to Amazon — and how Chechen strongman Ramzan Kadyrov got himself involved in the founder’s divorce. We also cover Russian propagandists having a field day with the Olympics opening ceremony and the war veterans being pushed into politics.

Divorce, Kadyrov and corporate raiders: The blockbuster saga at Wildberries

Online shopping has belatedly become a major industry across Russia over the last five years. After a slow start, online marketplaces are thriving and pick-up points can be found all over the country, even in the smallest remote villages. But market leader Wildberries hit the headlines last week for something other than its rapid growth, with a scandal that involves a major corporate takeover and a multi-billion-dollar divorce. The saga has spiraled into one of the biggest domestic business stories since the start of the war after co-owner Vladislav Bakalchuk publicly set his (soon to be ex-) wife — Tatyana Bakalchuk, the company founder — on a collision course with Chechen leader Ramzan Kadyrov.

• Until recently, the story of Wildberries and its founder Tatyana Bakalchuk had all the hallmarks of a feel-good Hollywood flick: an English teacher from the outskirts of Moscow who, out of little more than hard work built Russia’s biggest online marketplace from scratch and claimed her title the country’s wealthiest woman. That’s the versionthe company likes to promote anyway. In reality, Tatyana’s husband, Vladislav, was already an experienced entrepreneur when she launched Wildberries. He was running a telecoms business and had earnt several million dollars from selling a stake in an internet provider. At the same time, he became acquainted with his future business partner Sergei Anufriyev, who offered to buy him $1-5 million worth of Adidas products for Wildberries to sell in Russia. Anufriyev later became a powerful shareholder in the businesses. A source told The Bell he was able to “indicate which suppliers to take, how to do marketing, anything.” 
• After years of exponential growth, Wildberries in June announced a peculiar deal to merge with Russ, an outdoor advertising company that owns billboards across the country (more about that deal here). The merger was personally approved by President Vladimir Putin. The deal was particularly strange in that it was presented as a merger of equals, even though Wildberries is both far bigger than Russ and operates in a sector of the economy set to grow rapidly for years to come. Outdoor advertising, on the other hand, is a relatively small and potentially declining industry. Explanations that the deal would transform Wildberries from a simple retailer into a media platform don’t stand up to scrutiny given the marketplace already has an audience in the millions, as well as its own sophisticated technology and marketing infrastructure. After the merger was announced, several top managers started to quit Wildberries — including Anufriyev.
• Last week, seemingly out of nowhere, Chechen leader Ramzan Kadyrov published a video of him in conversation with Vladislav Bakalchuk in which he blasted those behind the deal — and backed Vladislav in a divorce spat that has now become the country’s most high-profile break-up. Vladislav complained to Kadyrov that his wife “left home, got involved with some unknown company which, under the guise of a merger, is squeezing out the business and stripping its assets.” In response, Kadyrov slammed those who would “destroy a family that has seven children,” saying that he “doesn’t consider them human” and calling them “devils.” The Chechen leader then ordered his right-hand man, deputy Adam Delimkhanov, to “sort it out.” Delimkhanov immediately announced that he was ready and taking action.
• Kadyrov specifically accused Russ’s owners of mounting a raider-takeover, pointing the finger at Levan and Robert Mirzoyan. According to Vladislav Bakalchuk, his wife “left home” in April and “began talking” with the Mirzoyans. She then removed her husband from Wildberries management and proposed the merger plan. Tatyana Bakalchuk herself wrote on social media that the deal is not a “raid” or hostile takeover. She said she is divorcing her husband and that he owns just 1% of the company. She called the merger with Russ an “essential transformation to maintain the rate of growth and development.”
• The Bell spoke with several market sources familiar with the deal — most are convinced that the merger is being pushed by Suleiman Kerimov, a senator and oligarch from Putin’s inner circle who they say backs Russ.
• Russian entrepreneur and co-owner of the DNS tech chain Dmitry Alexeyev believes that Bakalchuk could lose control over the company, highlighting how the company is now registered at Russ’ corporate address and that the Mirzoyans will be “hard to oust”.
• Absolutely all market sources agree that personal circumstances are playing a major role in both the merger and the subsequent conflict. “Tatyana fell in love, and her love is connected with Russ,” one source told Forbes, saying how people in Russ may have helped Wildberries get out of a potentially tricky legal situation. The starting point for that could have been a January fire at one of Wildberries’ biggest warehouses near St. Petersburg, a source told The Bell. After it emerged that the warehouse did not have all the required permits, Wildberries ran into problems with the authorities, with Investigative committee chief Alexander Bastrykin personally ordering the opening of a criminal case into the fire. The Russ owners reportedly helped to quash any further escalation for Wildberries — and are now cashing in.

Why the world should care:

Wildberries has a unique place in the Russian economy. In 2023, goods worth 2.5 trillion rubles ($29 billion) were sold on the platform — more than 5% of all Russian retail trade. But a shareholder conflict in such an important company, plus the personal involvement of Ramzan Kadyrov, make this more than just a business squabble. This conflict is an important test for Kadyrov himself. The war enabled the Chechen leader to acquire several new assets through his proxies — but is he powerful enough to unpick a deal that was personally approved by Putin?

Russian propagandists slam Olympics opening ceremony

The opening ceremony of the Paris 2024 Olympics — which attracted criticism for its apparent reinterpretation of the Last Supper featuring drag performers — proved a gift for Russian propagandists. They jumped on the opportunity to rehash one of their favorite talking points — the decadence of a liberal Europe that has no respect for “traditional values.”

• State TV channel Rossiya 1 said the ceremony was “a tasteless show for the needs of the day, featuring trans people and transvestites in a mockery of Bible stories (that) shocked many in France.” Talking heads described the ceremony overall as a “Walpurgis night,” a Pagan-esque festival that supposedly marks the night when witches would gather to perform rituals.
• State-run news agency RIA Novosti described it as a “freak show with transvestites.” It complained about the inclusion of the LGBT+ community and the fact that Russia is barred, while Israel is allowed to compete. They adopted their long-standing practice of using “public” comments to highlight “outrage” at the ceremony — without providing any actual sources, thereby making it impossible to verify.
• Rossiyskaya Gazeta, the Russian government’s official newspaper, quoted a French pensioner who allegedly complained about “Bacchanalia with transvestites [in which] not even Christ and his apostles were spared.” 
• Russian officials also criticized the opening ceremony. State Duma speaker Vyacheslav Volodin called it “France’s shame.” While foreign ministry press secretary Maria Zakharova said it was “a mockery of a subject sacred to Christians,” adding that “since the Olympic rings are multicolored they in Paris think they can turn everything into a full-on Gay Pride parade.”

Why the world should care:

Russian propaganda never misses a chance to criticize the west, and the Olympics opening ceremony was a great example. Narratives about an erosion of everything sacred are regularly trotted out to promote the agenda of “traditional values,” which Russia purports to be a defender of.

Russia’s new elite being pushed into politics

Russian soldiers who have fought in Ukraine have become a powerful new social class in Russian society. They get state subsidies, extra welfare payments, career boosts, and, for some, a fast track to power. President Vladimir Putin often calls veterans and soldiers Russia’s “new elite,” asserting that the leadership of the country could be safely transferred into their hands at some point in the future. Independent Russian TV channel Dozhd investigated how those returning from the front have cashed in on their time in the Russian military to transform their lives.

• The Dozhd report looks at several people who have returned to Russia after fighting in Ukraine and are now receiving some kind of preferential treatment from the state. Sergei Bormotov used to direct a ballroom dance troupe before he volunteered to serve at the front. He was discharged due to his age and back home was invited to run for city council in Chelyabinsk, and became an assistant to an MP in the State Duma. The elections have yet to take place, but Bormotov won in primaries for the ruling United Russia party. 
• Irina Erdneyeva, whose husband was killed in the war, became head of the Committee of Soldier’s Families in Kalmykia, one of Russia’s poorest regions in the south of the country. She enrolled at Synergy, a private Russian university, free of charge and without any problems, and children of veterans get free kindergarten places and free school meals. 
• Evgeny Strazhinsky, a mechanic, was head of a manufacturing workshop before the war. In 2021, he stood for election to local government in the small town of Urai in Khanty-Mansiysk (one of the most oil-rich regions on Earth, located in central Russia). After defeat at the polls he lost his job — according to Strazhinsky, this was at the request of the election winner. He was mobilized to the front and, while serving, was invited to stand for election again, this time on the United Russia ticket, the party he previously ran against. “There’s no other way you can get [into power],” he said.

Why the world should care

Most Russian soldiers are not looking to launch a political career, and most that do are not successful. This spring, the overwhelming majority of “veterans” that stood in primaries to be a United Russia candidate in regional elections taking place later this year were defeated. Nonetheless, the status of being a “participant in the special military operation” opens up the kind of political opportunities that pre-war opposition figures in Russia could only dream of. Describing the mindset of many Russian veterans, sociologist Oleg Zhuravlev told Dozhd: “These people not only welcome the war, they have some requests for the state, some ambition to take part in political life ... They are critical of corruption in the military.”