Wish marketplace reports falling sales and another quarterly loss
Unlike many ecommerce retailers, Wish failed to gain traction during the pandemic. The marketplace hasn’t reported a net profit since the second quarter of 2019.
Wish is an app-based marketplace for very inexpensive goods, the majority of which are sold by merchants in China. The marketplace is filled with a wide variety of items in big number of categories. All the merchandise is of low cost. The average ticket on Wish is $17. By contrast, the average ticket on Alibaba Group Holdings’ Taobao is $93.
The company continues to struggle to achieve profitability. The parent of the Wish marketplace reported sales of $189 million in the first fiscal quarter of 2022, a decrease of 76% year over year.
The Wish marketplace posted a net loss of $60 million in Q1, the 11th straight quarterly loss, but a 53% year-over-year improvement from the $128 million net loss in the first quarter of 2021.
ContextLogic Inc., the San Francisco-based parent company, has stumbled badly in recent years. In December 2020, the company went public in an initial offering that valued Wish at about $17 billion. Now trading on Nasdaq under the ticker symbol WISH, the company has a market capitalization of around $1.12 billion.
Wish has long struggled with quality issues and customer satisfaction. Deliveries from Wish merchants in China take a considerable amount of time. The supply chain crisis and the pandemic led to additional slowdowns.
The Wish marketplace is taking steps in improving delivery and customer service and notes that its Net Promoter Score (NPS), a measurement of customer satisfaction, has improved from a -66 in May of 2021 to a -27 today.
Vijay Talwar, Wish CEO, said in a written statement that they are seeing progress in their turnaround in just a few short months, including a doubling of the NPS, and lower post shipment refunds.
During a call with analysts, Talwar said employees in China were facing difficulties under COVID restrictions. The company has some 200 employees in Shanghai. As lockdowns spread and shortages grew, the company sent emergency supplies to its workers. In addition, the company faced headwinds when COVID restrictions closed ports in both Shanghai and Shenzen. Talwar said Wish managed to move 90% of delayed shipments to other ports in March.
Wish launched a redesigned app for Android phones during the quarter. An app for the Apple operating system will launch before the end of Q2, Talwar said.
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