The effect of the Ukrainian war on eCommerce

It goes without saying that people will always come before business. This conflict between Russia and Ukraine is first and foremost a humanitarian catastrophe. As such we understand it, and we are deeply shocked by what is happening.

 

Having made this important clarification, we will now focus on another of the many important aspects of this complex issue: the economic one.

Having a war on the very borders of Europe would already be a serious problem for imports and exports. But if, in addition, one of those involved is one of the most powerful countries in the world... everything becomes extraordinarily complicated.

 

Let's see at what levels we will all be affected to a greater or lesser extent by the war scenario in which we find ourselves.

Let us not forget that the COVID-19 pandemic was already greatly complicating the supply chain from the first link to the last, starting with the fact that it stopped the extraction of raw materials and the production of manufactured goods.

 

By the time trade was reactivated almost simultaneously around the world, China found itself unable to meet global demand. In a way, we can say that this role as the world's largest manufacturer has caused it to generate a very important collapse from which, before the war began, we were still far from starting to leave.

 

Now let us add that Russia is the leading producer of metals such as palladium and nickel, and the third largest exporter of steel globally, to which we can add construction materials and machinery.

Closely related to the previous heading, we found that logistics simply could not absorb the volume of shipments being generated. There were not enough ships and road transport was also stretched to the limit. Hence the famous container crisis.

With the war conflict in full swing, we were faced with two additional circumstances that complicated everything even further:

In fact, Russia is particularly characterized by being a territory that, rather than being autonomous, is tremendously hermetic. In terms of eCommerce, for example, Amazon is by far not the most powerful platform.

 

Nor do they use Google as massively as in the West. The market share of Yandex -their main competitor- is 34%, which means that even in terms of SEO everything is more controlled internally.

Another thing to take into account are the services, because Google and Apple have suspended their payment systems that were massively used by the population to make transactions. 

In addition, the sanctions of the international community have also directly influenced the banking system, leaving Russia partially out of it, so that the means of payment have been significantly complicated (coupled with a galloping recession due to a certain internal "corralito" and the unstoppable depreciation of the ruble).

 In addition, we see how major global brands have taken the step to temporarily stop selling on Russian territory. Nike's sporting goods, Apple's electronic devices, textile firms like H&M... we will never know exactly what political component there is in the decision and how much of logistical or economic problems.

 

Therefore, sectors such as tourism, real estate (and all the businesses that orbit around it), alcoholic beverages or fashion... will inevitably suffer the blow.