Have you ever heard of Wish.com? If not, you should learn. It could potentially shakeup the e-commerce world in a big way.
Paul Szulczewski, former software engineer at Google (GOOGL - Free Report) , founded Wish.com’s parent company Context Logic in 2010 alongside friend Danny Zhang. They did so to compete against Google’s online advertising platform, AdWords, through use of machine-learning technology. This effort would ultimately spin into Wish.com, an entirely mobile e-commerce platform that allows consumers to purchase items directly from producers in China for extremely cheap prices.
Here are three reasons why you should know about Wish.com:
1. Huge Investors
According to CrunchBase, Wish.com has raised $1.3 billion in funding since its inception. Of that, $1.25 billion has been raised over its last three rounds, from a list of investors including Founders Fund ($50 million), DST Global ($500 million), and the China-based Everbright-IDG Fund ($500 million). The funds’ portfolios boast big names such as Twitter (TWTR - Free Report) , iQiyi (IQ - Free Report) , and Facebook (FB - Free Report) , just to name a few.
The investments are a strong signal of confidence in the firm’s future and reflect an ever-increasing overall valuation.
2. LeBron James
A majority of the funding that Wish has received has gone directly towards the firm’s very aggressive marketing campaign. While data is difficult to come by, a Recode article from 2015 stated that the company spends around $100 million a year on Facebook ads, and was the number one advertiser on both Facebook and Instagram over the holidays.
Many eyebrows were raised when Wish announced last September that it would be spending between $36 million to $42 million to sign a three-year advertising deal with the NBA’s Los Angeles Lakers. As part of the deal, the Wish logo would be put on the front of the team’s jerseys for the duration of the contract.
At the time, the deal already made sense because L.A. accounts for more sales for Wish than any other metropolitan area in the United States. Another big motivation is the fact that many of its over 600,000 Chinese vendors are huge Lakers fans. The Lakers are one of the most prestigious teams in the NBA, and the brand association is a big boost.
Earlier this week, superstar LeBron James signed a four-year deal with the Lakers, making that Lakers partnership even more lucrative for Wish. Recode notes that when James was on the Cleveland Cavaliers last year, the team’s sponsor, Goodyear, received about $21 million in ad exposure on social media, making it by far the most valuable deal in the league. At the time, the Lakers and Wish sat in fourth place with $5 million. With James drawing more eyes to the team and thus to Wish, the company could potentially see even more attention from new customers.
3. Massive Popularity
On Apple’s (AAPL - Free Report) 2017 list of most popular applications, Wish came in a respectable 15th place, notably ahead of Twitter, Soundcloud, Google Chrome, and Lyft. It was the second most popular shopping app, behind only Amazon (AMZN - Free Report) , which came in 13th place. As it continues to market itself through different channels, it could very likely continue to rise in popularity.
Similar Web released a study on the top online shopping sites so far in 2018, finding that Wish was the ninth most popular website, with monthly traffic of 38.7 million people. An important point however, is that of all popular online shopping sites, Wish sat alongside Walmart (WMT - Free Report) as seeing the most mobile traffic.
According to CEO Szulczewski, the company already earns revenue in the “single-digit billions.” With growth initiatives in place and important backers supporting it, Wish could be a potential target for an IPO in the next few years. The company does still have plenty of issues to iron out, including a lack of vendor regulation, long shipping times (2-4 weeks), and relatively lower quality products.
However, what makes Wish unique is that it isn’t trying to become a luxury platform. It markets itself to an audience that wants the satisfaction of easily buying cheap items that are of decent quality for the price.
Wish knows what segment of the market it wants to target, and is doing just that.
Investors should consider keeping an eye out for more news involving Wish.com and a potential IPO down the road.
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