Asian e-commerce platform to acquire Wish for bargain price
One of the world’s largest mobile e-commerce platforms has reached an agreement to be sold.
ContextLogic Inc. has sold its struggling discount e-commerce platform Wish to Singapore-based Qoo10 for approximately $173 million in cash. It's a steep fall for a company which raised $1.1 billion in its IPO in December 2020.
Founded in San Francisco in 2010, Wish got off to a strong start, but it has faced increased competition from the likes of Shein and Temu. Its revenues were down 52% year-over-year in its most recent third quarter, which followed a 66% decline a year earlier. In November, the company said it was reviewing strategic alternatives to "maximize value for Wish shareholders."
Qoo10 operates localized online marketplaces in Asia, a major region for Wish. Following the close of the transaction, the Wish brand and platform will become a part of the Qoo10 portfolio of businesses. Wish says its retailers should benefit from an integrated platform that will unlock new cross-border e-commerce opportunities, while Wish users are expected to benefit from a greater selection of goods at competitive prices.
“Integrating the Wish platform into Qoo10 will create a true global cross-border ecommerce platform to support the massive market demand,” said Joe Yan, ContextLogic CEO. “Upon close, we expect the new Wish platform will have an improved customer experience through increased product assortment and merchant selection. And for our retailer, we will be able to offer fully integrated logistical capabilities to deliver unmatched cost-efficient services with high quality control and transparency.”
“Wish has innovative technology that provides highly entertaining, personalized shopping experiences for its users while serving as one of the largest global e-commerce platforms,” said Qoo10 CEO and founder Young Bae Ku. “By combining our operating expertise and Wish’s technology and data science capabilities, we expect to drive greater success for retailers while providing an even greater marketplace for consumers globally.”
The company expects to complete the transaction in the second quarter of 2024, subject to the approval of ContextLogic’s shareholders and other customary closing conditions. The transaction is not subject to any financing contingency. As part of the agreement, ContextLogic will begin trading under a new ticker symbol within 30 days of the closing of the transaction.
ContextLogic intends to submit the plan to a vote of its stockholders at its 2024 annual meeting of stockholders, which is expected to take place in the second quarter of 2024.
[Read more: Exclusive Q&A: Wish outlines ‘three pillars’ of e-commerce success]
J.P. Morgan Securities LLC is acting as financial advisor to the ContextLogic and Sidley Austin LLP is acting as legal counsel. Jefferies LLC is acting as financial advisor to Qoo10 and Shearman & Sterling LLP is acting as legal counsel.