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, as the company continues to struggle to achieve profitability.
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 is No. 16 in the Digital Commerce 360 2022 Global Online Marketplaces Database.
Wish marketplace and China lockdowns
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 every imaginable category. The only commonality among the merchandise is low cost. Digital Commerce 360 estimates the average ticket on Wish is $17. By contrast, the average ticket on Alibaba Group Holdings’ Taobao, No. 1 on the Digital Commerce 360 Global Online Marketplaces Database, is $93.
Wish has long struggled with quality issues and customer satisfaction. Deliveries from Wish merchants in China are known to take a considerable amount of time. The supply chain crisis and the pandemic led to additional slowdowns. But the Wish marketplace said it’s making headway in delivery and customer service. In particular, Wish 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.
“We are seeing progress in our turnaround in just a few short months, including a doubling of our NPS, and lower post shipment refunds,” Vijay Talwar, Wish CEO, said in a written statement. “These encouraging signs, particularly the increased NPS scores, give us confidence to believe that consumers will return to the Wish marketplace as we begin to ramp advertising spend in June instead of August.”
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.
For the three months ending March 31, Wish reported:
- A net loss of $60 million, a narrowing of 53% from the net loss of $128 million a year earlier.
- Total revenue of $189 million, a 75.6% drop from the $772 million in revenue reported for Q1 2021.
- Total cash, cash equivalents and restricted cash on hand of $767 million. That’s a 52.7% drop from the $1.62 billion of a year earlier.
Percentage changes may not align exactly with dollar figures due to rounding.
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