In an eCommerce world where top dogs like Amazon (AMZN) and eBay (EBAY) reign supreme, commentators have often remarked that there is no space for newcomers in the market. Yet, just over a decade ago, Wish burst into the scene and within just a few years, it managed to become the most downloaded shopping application worldwide and the third largest eCommerce marketplace in the U.S.
With a mission to bring an affordable and fun mobile shopping experience to billions of consumers across the globe, Wish facilitates transactions between buyers and sellers who offer everything from home goods to electronics to apparel. And while right from the onset, the company was known for its discounted knick-knacks and knock-off good, leading to accusations of poor quality and counterfeit goods, this hasn’t deterred users. With over 100 million monthly users and more than 500,000 merchants, Wish’s climb to the top has been meteoritic.
A brief history of Wish
One of the largest eCommerce marketplaces in the world, Wish was founded in 2010 by former Google engineer Piotr Szulczewski, initially as a software company named ContextLogic. The same year, the company received $1.7 million in investments and involved Jeremy Stoppelman, the CEO of Yelp. A year later, Szulczewski brought onboard his college friend Danny Zhang to relaunch the company as Wish.
Originally, Wish was created as an application that allowed shoppers to create a list of their favourite products before matching them with merchants, however, by 2013, the app became an online retailer itself after asking merchants to host their products directly through it, while Wish took a portion of each sale. By 2017, the platform had become highly successful, capturing both Amazon and Alibaba‘s attention. According to a report by Business Insider in 2015, the tech giants showed serious interest in buying the eCommerce company, with Amazon in particular reportedly offering $10 billion to buy Wish. Whether rumours or hard facts, the acquisitions never materialised.
Then, in the summer of 2017, Wish set foot in Europe by opening an office in Amsterdam. With a physical presence there, the company sought to attract more local merchants to their platform. A year later, it signed a deal with PostNord so that Swedish customers could get their orders faster, while at the same time, it became the most downloaded eCommerce application worldwide, doubling its revenue to $1.9 billion.
What sets the app apart from others is that the platform employs browsing technologies which personalise the shopping experience visually for each customer instead of relying on the search bar format as other apps do. In addition, the company works with payment service provides to handle payments, while it doesn’t stock the products nor does it manage returns. With over 100 million monthly users, more than 500,000 merchants and approximately 150 million items for sale, Wish has revolutionized the way consumers shop by providing a personalised and fun experience right through their mobile devices.
The platform got its name from the company’s original business model as a wish list. Through the app, users could make a wish list of the products they hoped to get their hands on. They could then order these on other websites, enabling Wish to earn money with affiliate links.
When did Wish go public?
ContextLogic went public via an IPO in 2020, at a time when online sales were soaring as the COVID-19 pandemic was making people shun trips to stores in favour of shopping safely from the comfort of their homes on their smartphone. As a result, the company was expected to enjoy a hugely anticipated first-day pop on Wall Street. Instead, Wish’s opening trade was $22.75 per share, below its IPO pricing of $24 per share. Nonetheless, the offering raised $1.1. billion, while it gave the company an initial valuation of more than $14 billion, above the $11.2 billion valuation private investors had initially given to the company.
Is Wish a buy?
While Wish hit a high of $32.85 after its capital market debut, the stock has steadily traded lower. In fact, it had dropped as low as $7.52 before receiving some attention on the popular WallStreetBets, where some writers pointed out that WISH could be the next short squeeze target. But the company has the potential to offer a lot more than just being mentioned on the longstanding subreddit channel where over 3.5 million Reddit users discuss highly speculative trading ideas and strategies.
Without a doubt, 2020 was monumental in triggering sweeping changes in the way we work, study, shop and play. Booming amid the COVID-19 pandemic, the digital and eCommerce sectors have seen unprecedented and unforeseen growth. As lockdowns became the new normal, businesses and consumers increasingly went digital, providing and purchasing more goods and services online and raising eCommerce’s share of global retail trade from 14% in 2019 to about 17% in 2020, according to a report by the United Nations Conference on Trade and Development (UNCTAD).
And Wish has been one of the many eCommerce platforms to benefit. In the first nine months of 2020, the company reported revenues of $1.75 billion, up 32% from the same period in 2019, while the platform facilitated the shipment of more than 640 million items to buyers across more than 100 countries during the 12 months ending September 30, 2020. Wish’s momentum has carried on well into 2021. For its first quarter ending March 31, 2021, the company reported a revenue growth of 75% year-over-year, an acceleration from Q4 of 2020, while core marketplace revenue per active buyer increased 76% year-over-year. Adjusted EBITDA margin on both a sequential and year-over-year basis was also improved, reflecting leverage in its business model.
Not to mention that more than 100 million monthly active users across 100 countries are fuelling WISH’s platform growth, with ContextLogic gaining 17 million users during the 2020 pandemic year alone.
What’s next for Wish?
During its latest financial results report, Wish stressed that its primary focus is to drive continued long-term growth through efficient user acquisitions, increased monetisation, as well as higher retention. So far, the company has managed to deliver on its plan and has seen momentum build for its latest initiatives, such as its Wish Local expansion, a programme that allows brick-and-mortar stores to serve as pickup locations for Wish online orders, in addition to its efforts to diversify its product selection.
The company has also managed to forge some noteworthy partnerships so far this year. In April 2021, it partnered with the South Africa Post Office (SAPO) to strengthen its logistics capabilities and customer experience for South African clients. The partnership is set to create over 50% faster transit times, better end-to-end tracking visibility and delivery confirmation, while customers will receive bundled shipments for multiple items. In June, it also joined forces with leading eCommerce platform PrestaShop, whereby 300,000 merchants and brands on the PrestShop platform will be able to quickly and easily sell to millions of consumers on the Wish marketplace.
But more importantly, as recently as July 2021, the Dutch Subsidiary of parent company ContextLogic was granted a Payment Services Licence by the Dutch Central Bank. The new licence is a first step towards allowing Wish to process all EU payments on its platform, increasing its control over the payments value chain in a compliant manner, while also reducing its reliance on third parties.
How to invest in Wish (WISH) stock with Moneybase Invest
Ready to buy a share in Wish (WISH)? Your first step to tapping into a world of investment opportunities with Moneybase Invest is to sign up and open an account.
To do so:
- Download the app from either Google Play or the Apple App Store. Alternatively, you may access Moneybase Invest on your desktop by visiting https://live.cctrader.com/
- Once you’ve onboarded successfully and have funded your account, head over to the search bar at the top of your screen and input either the company name or ticker symbol.
- Select the instrument of your choice from the list and then click on the Buy button on the window located at the bottom of your screen.
- On the New Order page, input the number of shares you would like to purchase and hit the Place Buy Order. WISH has been added to your portfolio.
Access over 20,000 Stocks, ETFs, Bonds & Funds and over 4,300 fractional US shares and ETFs on our award-winning platform, with no hidden fees and instant market execution.
Moneybase Invest is brought to you by Calamatta Cuschieri Investment Services Ltd and is licensed to conduct investment services business by the MFSA under the Investment Services Act.
Moneybase Invest offers direct market access and speed of execution and is intended for knowledgeable and experienced individuals taking their own investment decisions. The value of investments may go up and down and currency fluctuations may also affect investment performance.
The contents of this article are not intended to be taken as a personal recommendation to invest but strictly based on research and for information purposes only. Retail investors should contact their financial adviser for a suitability assessment prior to taking any investment decisions.