The Wish e-commerce platform is in deep trouble. Szulwczewski steps down as president – Biznes

Same the American dream of a Polish programmer, Peter Szulczewski, whose fortune in the spring of 2021 was estimated by Forbes at $1.7 billion, has just begun to crumblelike in the iconic “Inception” by Christopher Nolan. Szulczewski, 41, lived for the first 11 years in an apartment building in Tarchomin in Warsaw. From there, in 1992, he went with his family to Canada, where he obtained a degree in mathematics and computer science at the University of Waterloo.

Chinese sellers in the role of fairies

Wisha, an e-commerce platform for low-income consumers, was launched ten years ago with Danny Zhang. It was to allow the creation of dream product lists (the so-called wish lists), and the realization of these dreams was entrusted mainly to Chinese companies, in exchange for around 15%. sales commission for Wisha. Investors believed in a simple concept.

One of the first was Jerry Yang, co-founder of Yahoo – he invested $1.7 million in Szulczewski’s company. Then there were funds that totaled $1.25 billion. For the first few years, business was good. Wish entered new markets, becoming the most downloaded shopping app in the world in 2018 and the third largest marketplace in the United States. And myself In 2019, Szulczewski debuted on the list of the world’s richest people with assets estimated by Forbes at $1.4 billion. While his fortune was valued at $1.8 billion in the spring of 2020, Wish was still doing very well as the pandemic made the platform with extremely low prices more popular. But for a while. When prices for shipments of up to 2kg from China to the US doubled in mid-2020 and broken supply chains dramatically lengthened the time Chinese sellers have to ship goods directly to consumers, the yellow light for the future of the platform has been lit.

Szulczewski, however, assured that Wish will take care of it and that the remedy will be a chain of small warehouses in local stores. Initially, the drug worked, and in 2020 ContextLogic (Szulczewski now owns an 18% stake in it) shut it down with a 34% increase in revenue. When the company went public in December 2020, the stock was paid $24, which raised $1.1 billion, and its valuation reached $17 billion. However, the shares began to fall rapidly – they had not exceeded the $10 threshold since August 2021 for paper.

To wish. Schedule

Photo: Forum; youtube.com/TreasureData; press material

High price of hazardous waste

The price cushioning is the result of lower revenues, which fell 39% in the third quarter of 2021 due to problems with supply chains and an increase in shipping costs from China. Every year. To make matters worse, they are expected to fall again in the fourth quarter – even taking into account the industry’s harvest festival. The dramatic outflow of customers is also worrying – at the time of its debut, Wish served over 100 million monthly active users, while in Q3 2021 it was just 60 million. 32 percent The number of active buyers also fell – to 46 million. Product quality issues have also proven to be a drag on a company trying to stay afloat.

Learn more failures of entrepreneurs, which turned out to be a valuable lesson

Wish, focusing on low prices, has seemingly forgotten about it, becoming a bazaar with often dangerous waste. For this reason, at the end of November 2021, following a year-long investigation, French regulators ordered national app stores and search engines to remove it from their database. In turn, in the spring of 2021, Italian authorities opened an investigation into unreliable home COVID-19 tests sold on Wishu. Wish defended itself, arguing that its status as a marketplace meant that “there is no legal obligation to inspect the 150 million products offered for sale on the platform”. However, the appeal was dismissed on December 17, 2021 by a French court which upheld the Ministry of Economy’s order to remove the platform from French app stores and Google and Bing search engines.

Szulczewski’s company doesn’t say how much it sells in France and Italy, but we know 47%. its revenue for the first nine months of 2021 came from Europe. So if other European countries follow the example of the French, the company’s situation risks becoming dramatic.

As if there weren’t enough trouble, in late 2021 Szulczewski announced that he would step down as chairman by the end of January 2022 at the latest, but would remain on the company’s board. . This move – although probably intended as a new opening – can be seen as a coaching change in the middle of a losing game. Time will tell if this desperate decision may prove to be the beginning of the end for Wish.

Leave a Comment