Wish.com has seen its share prices divebomb nearly 30 per cent after it reported a drop in revenues, losses and users due to a “number of headwinds”.
The discount ecommerce marketplace has now seen its shares drop nearly 80 per cent from highs of $31.19 in February to just $6.87, just eight months after it went public.
Its latest drop in shares followed its most recent quarterly earnings report for the three months to June 30, in which Wish reported a 6.4 per cent drop in revenues across its core marketplace to $656 million, coming well below average analyst expectations of a slight increase.
Meanwhile its net losses skyrocketed from $11 million in the same period a year earlier to $111 million, representing 17 per cent of its total revenue.
This was partially down to a concerning drop in users, seeing monthly active users drop 22 per cent to 90 million, app installs to fall 13 per cent and average time spent on its app to fall 15 per cent.
“From a macro perspective, as vaccine rates increased, stay-at-home orders began to ease, and economies started to more broadly reopen around the world, daily user activity and active buyers on our platform declined more than we had anticipated, particularly in the U.S., France and Italy — three of our largest markets,” Wish’s chief executive Peter Szulczewski said.
While many of Wish’s rivals, including Amazon, Ebay and Etsy have also shown signs of slowing sales as western economies begin to reopen, Wish’s troubles started long before the pandemic-driven online boom began to wane.
In November 2020, a month before it went public, Wish reported net losses of $176 million despite seeing runaway revenue growth of 67 per cent over the preceding quarter.
Then in March, Wish revealed that its active user base had dropped 10 per cent, compounding a 16 per cent drop in its share price since launching in December.
Its chief financial officer Rajat Bahri then announced his departure a month later, leading analysts including William Blair to downgrade the company’s stock.
Wish said in its quarterly revenue statement that it has “begun executing on initiatives designed to enhance the user experience and increase engagement on the Wish app following second-quarter results that did not meet our expectations”.
“We expect our focus on enhancing product quality and selection, providing an unmatched fun and entertaining shopping experience, and improving the performance of the app, will drive new user growth, retention and profitability over the long term. We are working hard to improve our performance and are confident that Wish will emerge as a stronger business.”