Will going public lead to riches or ruin for Wish?

Wish, an e-commerce marketplace that came to prominence offering customers cheap, sometimes bizarre products, factory direct from China, went public in December of 2020. After an early drop in share price, investors are not proving to be bullish about the company’s post-IPO prospects.

Wish experienced a 16 percent drop in share price on the day it opened for public trading, according to Yahoo Finance. Of 31 IPOs raising in excess of $1 billion dollars this year, Wish was at the bottom of the list. To the contrary, other hotly-anticipated IPOs during the same time frame, like Airbnb and DoorDash, experienced spikes when they began trading.

One analyst posting on Seeking Alpha noted flaws in the Wish business model — its tendency to spend a great deal of money on marketing online and via social media, an apparent lack of customer loyalty and the poor quality and potentially unsafe products on offer. The analyst also pointed to a lack of uniqueness and quality of the platform.

Fluctuations in trade relationships between the U.S. and China have also impacted Wish’s operations. For instance, a rollback of a UN ruling that allowed China to be treated as a developing nation subject to lower shipping fees forced Wish to invest significantly in logistics, according to a Financial Times article. The company has built out its own logistics system and now handles shipping arrangements for almost half of its orders.

There are other apps that provide similar and similarly-sourced types of products which have been gaining traction stateside. AliExpress, for instance, is the China-based discount e-commerce platform owned by Alibaba.

Both Wish and AliExpress have been the subject of articles urging caution for those considering shopping on the websites/apps. Users have reported purchasing bootleg items by accident and non-working items in some categories, as well as dealing with excessive shipping times.

While purchasing devices or novelty tchotchkes on Wish can be a crap shoot, some have argued that the business model is popular enough for some big names to take notice. In 2018, Amazon launched a $10 or less microsite, which TechCrunch pointed to as an attempt to establish a presence in Wish’s niche.

• Retailer Wish Drops in Trading Debut After IPO Spree – Yahoo Finance
• Are foreign shopping apps stealing share from off-pricers in the U.S.? – RetailWire
• China’s bargain shopping sites push to build own shipping networks – Financial Times
• Is AliExpress Safe? Tips To Shop Safely On The Chinese Platform – FossBytes
• Why You Should Be Careful Buying From Wish.com – Hacked
• Amazon launches $10 or less store – RetailWire