Amazon rival Wish files to go public amid online shopping boom
Wish, an alternative to Amazon that replaces convenience with low priced goods shipped directly from China, has revealed sales of more than $1.7bn (£1.3bn) this year as it filed to go public in New York.
The ecommerce company said revenue had grown 32pc in the nine months ending September 30, but reported a loss of $176m, up from $5m in the same period a year ago. It put this down to supply chain closures amid higher demand during the pandemic.
It joins Airbnb and Roblox in filing this week as private companies look to debut before the year ends.
Founded by Peter Szulczewski, a Polish born former Google engineer and Yahoo veteran Danny Zhang, Wish follows a similar business model to Chinese giant Alibaba’s ecommerce site AliExpress.
Its headquarters are in San Francisco but most of its merchants are in China, who can offer cheap prices but often take a long time to ship and deliver products, leaving customers with a long wait for their items.
According to documents filed with the US securities regulator, Wish uses proprietary algorithms to collect and analyse data on shoppers including historical and recent browsing data, past transactions and reviews, claiming this helps it get an average of 40 items added into carts for every 100 users because it can personalise the items it show users.
Gareth Bale promoted Wish during the World Cup in 2018 when it was barely known to shoppers in the UK
Despite being promoted by footballers Gareth Bale and Paul Pogba, the company has courted controversy in the past. It came under fire for selling banned knives and tasers to UK shoppers in 2018. Facebook adverts showing fake tongues, sex toys and "cat masks" on the site caused a stir in 2017.
Wish said it is focusing on selling to households with lower incomes in the Middle East, Africa. South America, Eastern Europe, markets which retail rival Amazon has left largely untouched.
Investors include Peter Thiel’s Founders Fund along with DST Global, Formation8, GGV Capital and Republic Technologies. Mr Szulczewski controls 65.5pc of the company’s Class B shares, giving him around 58pc of its total voting power.
The filing, published on Friday, highlighted potential challenges to the company including merchant fraud and opposition from the Chinese government.
Merchants have previously conspired to create fake sales to appear more trustworthy on its website and bump up their items when customers search, it said. Wish warned that it may not be able to crack down on this in its entirety, potentially prompting governments to intervene.
It added that it was subject to the rules of China which has stringent internet regulations – which it noted could become even more tricky to operate in. The Chinese government could shut down operations and take control of Wish’s income if they felt they had broken the rules, some of which are not made clear until it is too late.
“The People’s Republic of China’s system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have a retroactive effect,” the filing stated.
“As a result we may not be aware of our violation until sometime after.”