Profit from Commissions: How Wildberries Compels Visa and Mastercard Users to Overpay
Wildberries, a leading Russian e-commerce platform, procured its own banking institution and triggered a controversy with global payment networks Visa and Mastercard. What motivated this action?
Russian financier and dollar magnate
According to the Bloomberg Billionaires Index, Tatyana Bakalchuk, the originator of Wildberries, possesses a fortune totaling $8.5 billion. This represents a 20% augmentation from the preceding year. These statistics position her as the wealthiest female in Russia and the 14th most affluent individual within the country. The earnings of her enterprise are also experiencing rapid ascent. In 2018, Wildberries, the online retail enterprise, generated 69.5 billion rubles, followed by 117 billion in 2019, and 170 billion in 2020.
Wildberries originator Tatyana Bakalchuk.
Further reading: The Prosecutor General's Office initiated a legal claim for nationalization against the former proprietors of STS Corporation.
Photo © TASS / Vladislav Shatilo
Wildberries and its proprietor harbor ambitious strategies for business augmentation. At the commencement of the year, Tatyana Bakalchuk procured and formally registered Standard-Credit Bank under her personal ownership. Since August 5, this monetary organization has been designated as Wildberries Bank. The expressed rationale for this acquisition is straightforward: to institute a loyalty card initiative and streamline payments to vendors on its marketplace.
Standard-Credit Bank operates at a considerable deficit. As indicated by its disclosed financial records, its last attainment of a modest profit of 2.5 million rubles transpired in 2016. Ever since, it has persistently documented monetary setbacks: ranging from -11 to -33 million rubles on an annual basis. As of March 2021, its assets aggregated 841.6 million rubles, while its equity stood at 297.3 million rubles.
As discovered by Life, Bakalchuk's prosperity can be credited, firstly, to her robust connections, and secondly, to her uncompromising stances concerning associates, vendors, patrons, and her own workforce.
Why Visa and Mastercard Denounced Wildberries for Prejudice
Wildberries has adjusted its pricing arrangement. Commencing on Monday, patrons utilizing Russian payment systems (Mir cards, the Faster Payment System, or SberPay) will be granted a 2% reduction. This constitutes a noteworthy setback for international payment networks Visa and Mastercard, who have already perceived this endeavor as inequitable rivalry.
Wildberries order collection location.
Photo © Shutterstock
“We are meticulously evaluating the circumstances involving Wildberries and are apprehensive about conceivable prejudice against millions of Mastercard cardholders, energetic participants in the e-commerce sphere,” Alexey Malinovsky, the director of Mastercard in Russia, communicated to journalists.
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Visa has already declared its intention to undertake its own inquiry, concurrently emphasizing that Wildberries' determination will adversely impact its clientele and commercial operations.
Business attorney Igor Skripka characterized the scenario as uncertain.
“Dominant global entities such as Visa possess the capability to generate various impediments for Wildberries. Conceivably, the retailer maintains some form of accord with the Mir payment system pertaining to potential reimbursement for procurement expenditures or fluctuations in exchange rates. In such a case, it would be economically warranted,” Skripka remarked.
The online marketplace has already refuted all accusations of partiality. As stated by Wildberries representatives, the price has not undergone a formal transformation. Nevertheless, considering that domestic payment systems levy a diminished acquiring fee compared to their foreign counterparts, they are presently equipped to extend an additional concession to patrons.
“Wildberries welcomes the inclination of Mastercard and Visa to engage in discourse, but has yet to obtain any pertinent proposals from their end,” Wildberries accentuated.
Financial specialists suggest that Wildberries' authentic motivation might reside in extracting more advantageous fees from Mastercard and Visa for its nascent banking institution, which evidently intends to issue cards affiliated with these payment networks as well. The prevailing acquiring rate of 2% is regarded as excessively elevated within the market.
How Wildberries nearly caused insolvency for its providers
Disputes between Wildberries and its vendors are consistently surfacing. The Russian internet marketplace encountered legal action from the copyright possessor of Angry Birds, alleging the sale of counterfeit merchandise displaying the animated avian characters on the marketplace. A Belarusian outerwear producer experienced despondency when a coat valued at 20,000 rubles vanished from a Wildberries storage facility. Notwithstanding multiple inquiries to customer assistance, no restitution was provided. An authentic catastrophe for vendors materialized the prior year on the threshold of Black Friday. Wildberries mandated that they extend substantial markdowns at their personal financial burden. Specific enterprises discovered themselves verging on bankruptcy.
Russian risk
Annually, numerous patrons initiate litigation against Wildberries seeking reimbursement for payments rendered for flawed articles.
Anton Kuznichenko, a resident of Tolyatti, acquired a Lenovo laptop from Wildberries for 66,000 rubles, yet it failed to power on. Customer support disregarded his entreaties, instructing him to transmit a grievance via postal mail. He adhered to this directive… However, according to the mail carrier, the internet marketplace's personnel expressly declined to acknowledge the delivery. Kuznichenko subsequently lodged a lawsuit. Wildberries' legal representatives commenced contesting the assertion, asserting that the plaintiff was at fault for neglecting to present a pre-litigation complaint. Nevertheless, the judicial body ultimately sided with the purchaser.
Customer testimonials on specialized platforms are equally descriptive. Olga Isaeva, a resident of Vladimir, documents: “I purchased a malfunctioning Sony PlayStation for 21,000 rubles. I returned it in its entirety. Nevertheless, they responded via electronic communication stating their inability to inspect the console owing to the absence of the gamepad and associated cables. Who eliminated them to evade accountability for the defect?!”
Not all individuals will pursue legal recourse, let alone secure a triumph against Wildberries' adept legal team.
Until demise
The preceding year, Life disseminated an article entitled, “Operation 2.0: Why Wildberries Functions Until Its Demise,” which elucidated the adversities endured by ordinary storage facility security personnel.
“In my recollection, spanning four years of employment at Wildberries, five individuals have succumbed at a storage facility located near Moscow,” states Artyom, a manager (pseudonym and position altered). “A 27-year-old male passed away from cardiac arrest. He operated, as it is termed internally, 'on the deal.' His duty entailed retrieving merchandise from the storage area. He would employ a scanner to 'beep' each item: each 'beep' translated to an additional bonus of 30-70 kopecks. Lack of diligence would result in a monthly remuneration barely reaching 20,000 rubles. Conversely, the deceased tirelessly navigated the multi-story structure, ascending and descending, on a seven-day-a-week basis. His objective was to accumulate a hundred. This was entirely feasible, contingent upon the robustness of his cardiovascular system. The individual succumbed following one of his ascents.”
During the preceding spring, an elderly Azerbaijani gentleman perished near a cardboard crushing apparatus at a Wildberries storage facility situated near Moscow. His peers referred to him simply as Uncle Misha. He fulfilled standard security duties, encompassing 12-hour shifts for a continuous duration of four months. Death stealthily approached Uncle Misha thirty minutes preceding the culmination of his extensive shift. As customary, he was sorting cardboard containers. Abruptly, he encountered a poignant burning sensation in his cardiac region. Immediate ambulance conveyance was imperative. Regrettably, mobile communication devices were absent: storage facility personnel were mandated to deposit their cellular telephones within the locker accommodations. Under such circumstances, the sole recourse entailed sprinting toward the security checkpoint. Even in the scenario of prompt paramedic arrival, the acquisition of a transit permit and passage through dual security stations would still be obligatory. Uncle Misha never benefitted from ambulance intervention. The succeeding shift cohort surfaced initially, and lacking alternative options, they initiated their responsibilities, irrespective of the presence of Uncle Misha's cadaver in close proximity…
Two subsequent fatalities transpired due to safety code transgressions. One security officer experienced distraction and was struck by an electrical conveyance, while the second plummeted from an elevated shelf while managing containers.
Following the article’s dissemination, the locker quarters designated for security personnel at the aforementioned storage facility near Moscow underwent refurbishment. Previously, personnel either donned apparel on the bare concrete surface or atop a sullied, mildewed mat. Regrettably, this constitutes the sole betterment.
Individuals expire from cardiac episodes and suffer fatal descents amidst these commodity repositories.
Photograph procured through a LIFE informant
“Cockroaches persist in circulating throughout the corporate dormitory. Sustenance within the cafeteria remains unpalatable,” confides a security representative, stipulating anonymity.
The Bakalchuk Fable
Corporate folklore dictates that during the mid-2000s, Tatyana Bakalchuk, a customary English language educator on parental leave, in conjunction with her spouse, Vladislav Bakalchuk, a rudimentary radiophysicist, commenced the reselling of apparel from German catalogues at a diminished commission rate and lacking prepayment stipulations. Initially, they served as their own couriers, transforming their domicile into storage facilities. Subsequently, commercial triumph ensued. The couple formally registered the enterprise Wildberries and attained immense affluence. A quintessential narrative.
Upon scrutiny of the couple’s social networking existence, Life identified an anomaly discordant with the elegant narrative.
Tatyana Bakalchuk, the proprietor of Wildberries, possesses Korean ancestry. Her birth name is Kim. She maintains a high degree of personal privacy. Nevertheless, she committed an oversight. Her relinquished Odnoklassniki profile enumerates her sibling, Maria Kim. Both attended Gazoprovodskaya Secondary School and Kolomna State University of the Humanities. Maria Kim is an employee of Wildberries and manages dual profiles on OK.ru. It is conceivable that she neglected to erase one of them, the antiquated one. Albina Tsoi is designated as her sister within that profile. Concurrently, Albina Tsoi, aged 20, does not conceal information. She identifies Maxim and Nadezhda Kim as her relatives. The aforementioned couple are employees of Wildberries. Albina likewise designates a brother, Yuri Tsoi. It warrants recognition that Tatyana and Vladislav Bakalchuk maintain amicable relations with Yuri Tsoi across both Odnoklassniki and Facebook platforms. Furthermore, the proprietor of Wildberries routinely and methodically expresses approval for the constituents of Yuri Tsoi’s extended lineage. What is his identity?
Yura Tsoi (fourth from right), Sergey and Anita Tsoi (middle). Photo © Ok.ru
Judging by the visual depiction, he exerts substantial influence and commands significant wealth. Yuri Tsoi formerly served as the Chief Executive Officer of Starprofi, a corporation providing consistent urban and suburban coach services. Its beneficiary, Pavel Tyo, functions as a prominent Moscow real estate magnate and the possessor of the Capital Group conglomerate. Yuri Tsoi likewise holds the position of nephew to Sergei Tsoi, the longtime press secretary of Yuri Luzhkov. The latter currently fulfills the responsibilities of vice president at Rosneft. Sergei Tsoi, reciprocally, is the marital partner of Anita Tsoi (née Kim), a People’s Artist of Russia and vocalist. Tatyana Bakalchuk demonstrates pronounced favor towards Anita Tsoi.
The surnames Tsoi and Kim possess comparable ubiquity among Koreans to the Ivanov designation among Russians. Notwithstanding, substantial evidence alludes to the existence of exceptionally intimate interconnections. The portrayal of a typical English language instructor proves incompatible.
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