US version pinduoduo wish rushed to IPO after investors worried about excessive dependence on the Chinese market

0
36

It is reported that contextlogic, the parent company of wish, an e-commerce platform, submitted an application for listing in the United States on Friday.
Before that, game software company roblox, as well as companies such as doordash, airbnb and affirm, all filed for listing in the past week. This means that the shares of all five companies will be listed from early December to mid December, before the holiday season.
Wish provides mobile e-commerce platform. The company’s main operations are in China, but are expanding into North America and Europe. According to the listing application, wish’s revenue growth last year fell sharply from 57% to 10% compared with that in 2018, but rose to 32% in the first nine months of this year. This shows that the new coronavirus epidemic is promoting more people to buy online.
Founded in 2010, wish offers a wide range of discount products, including cheap household goods and clothing, as well as electronics and toys. Many goods are priced at just a few dollars, thus attracting low – and middle-income consumers. These consumers see that the price of goods on wish platform is more affordable than that of large platforms such as Amazon.
Previously, wish was valued in the private market at $11.2 billion. Wish was able to ensure lower prices because most of the goods were purchased from China. Wish did not elaborate on how many of the more than 500000 sellers came from China. Marketplace pulse previously estimated that 94% of the sellers on the wish platform are from China, and the remaining 6% are from the United States, the United Kingdom, Canada and India.
Some investors worry that wish is overly dependent on the Chinese market. Wish’s prospectus shows: “because Chinese businesses can sell quality goods at competitive prices, our platform initially focused on expanding Chinese businesses. Over the past decade, China has been the world’s largest exporter of goods. ”
On the platforms of Amazon and Wal Mart, the proportion of Chinese sellers is also increasing, but the two companies do not rely on Chinese merchants as much as wish. Wish’s prospectus also lists the business risks associated with this. For example, in the first quarter of this year, wish’s platform revenue fell 8% year-on-year due to the “disruption of production and supply of goods” caused by the outbreak of the epidemic. However, wish’s business rebounded in the second quarter, up 67%. In the third quarter, growth slowed to 33% as “global logistics networks were affected.”.
Wish said measures were being taken to promote the diversification of businesses. Last year, more businesses from North America, Europe and Latin America were added to its platform. Since 2019, the number of American businesses has increased by 268%.
Wish is also investing in its own logistics services and working with third-party express companies to promote cross-border logistics. Wish, on the other hand, is developing its own brand. These products are produced or purchased in bulk by wish and then sold on its own platform.
According to the financial times, it now aims to list at a valuation of $25 billion to $30 billion. According to the media, some investment banks initially expected to list at a valuation of $400.