WISH

What is Wish (ContextLogic Inc.) and what does it do?

Wish brings you things you never knew you needed. Operated by ContextLogic Inc. out of San Francisco, it is one of the largest e-commerce marketplaces in the world. Wish connects over 250,000 merchants globally to a customer base of approximately 74 million monthly active users across more than 60 countries.

What's interesting is how they do it. Wish’s unique proposition is a mobile optimised e-commerce platform that drives merchant sales via images, as opposed to search input or text-based interactions. In their own words, Wish “provides a discovery-based shopping experience that mirrors how consumers have shopped for years in brick-and-mortar stores.” Window shopping for the age of Instagram.

Wish’s ultimate aim is to be affordable and attainable to value-conscious customers while being accessible everywhere through the localisation of various app features. Wish is currently available in 42 languages.

How does Wish make money?

Wish makes money in two separate business segments: marketplace and logistics.

Marketplace revenue

Within Wish’s marketplace segment, revenue is earned mostly through commission fees. Users purchase products from merchants on the platform and fees are charged when orders are finalised in Wish’s systems. Revenue also comes in the form of advertising fees from ProductBoost, Wish’s native advertising tool for merchants who want to drive product sales.

Logistics revenue

Wish helps merchants deliver their products straight to their customers through their “Advanced Logistics Program.” Wish earns revenue through merchants prepaying for usage of the logistics program on a per order basis. The program includes both transportation and delivery to the customer, wherever they are in the world.

Who owns Wish stock?

CEO Piotr Szulczewski is Wish’s largest shareholder, holding approximately 8.82% of total stock the value of which is over US$120m.

Other large institutional investors include Formation 8 Partners (7.21%), Vanguard Group (7.21%), GGV Capital (5.59%), and General Atlantic Service Company (2.84%).

At 50.1% of ownership, the majority of WISH’s shareholders are members of the general public.

Is Wish profitable?

No, Wish is not profitable. Since going public, Wish’s net income has always been in the red. In FY2021 alone, net income was negative US$361m.

Wish’s free cash flow took a nosedive from negative US$2m to negative US$953m between FY2020 and FY2021, close to a billion dollars down.

By their own admission, Wish’s “pricing strategies have had, and may continue to have, a significant impact on our revenue and net income (loss).”

Is WISH a good stock to buy?

ContextLogic Inc. went public in Dec 2020 with the WISH stock price at US$24 per share and quickly jumped to a high of over US$30 a month later. However, the WISH stock price has been in freefall since, dropping all the way down to a low of US$1.60; an incredible loss of over 90% in market value in 14 months.

Wish’s inconsistent revenue, negative operating income, net income and free cash flow have certainly spooked most investors.

To add fuel to the fire, C-level Wish employees including CFO Ying Liu, CPO Tarun Jain, Chief Accounting Officer Brett Just and Chief Legal Officer Devang Shah, sold close to US$5m worth of shares between September 2021 and March 2022.

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