Meet Wish, the $3 Billion App That Could Be the Next Walmart

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We think we’re going to be the second or third trillion-dollar-a-year marketplace,” Szulczewski, the CEO of shopping app Wish, told me. His company operates a family of e-commerce apps that sells a giant assortment of products at bargain-basement prices. “We think Alibaba will be first and then it’s either us or potentially Amazon depending on how quickly, or if, they win in India.”

Yes, that’s “trillion” with a T.

I paused for a beat to see if laughter was going to follow, but there was only silence. Alibaba launched in 1999, and its merchants did nearly $400 billion in sales in 2014. Amazon went live in 1995 and did an estimated $180 billion in gross merchandise volume in 2014. Wish? It only started selling goods in 2013 and just last year added other shopping apps like Geek and Mama that focus on specific product categories.

And yet, the growth Szulczewski has managed in under three years has him spouting what many people probably think is nonsense. He doesn’t care. Szulczewski says merchants are on track to sell at least $2 billion of goods through Wish over the next year. To come up with that figure, you have to multiply monthly sales (minus returns) times 12. Put another way, Wish hasn’t actually booked $2 billion over the last year, but it could in the next 12 months.

That helps explain why its backers, led by high-powered Russian investor Yuri Milner, valued Wish’s parent company, ContextLogic, at $3.5 billion when they invested $500 million early this year. That cash infusion makes it one of just two privately held e-commerce companies in the U.S. with a $3 billion valuation or higher (the other is Fanatics, an online seller of licensed team sports apparel).

Wish’s meteoric rise, accomplished mostly under the radar, can be traced to a potent combination of tech, advertising and discounting strategies. Unlike traditional shopping sites, Wish was built first and foremost to be viewed on smartphones, with a stream of product images that provides enough eye candy to keep people entertained during short sessions. It also employs a borderline-insane discounting philosophy that helps push shoppers to complete purchases before they click through to another app or look up from their phone.

The company has taken the direct-to-consumer fad to the extreme, connecting buyers directly to Chinese manufacturers who ship to customer’s doors from factories, cutting out middlemen and markups along the way. That helps explain the dirt cheap prices, from $7 sweatpants to $15 smartwatches, but also the long delivery times of two to three weeks.

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Pro tip: As soon as you install the app the welcome screen gives you the option to pick a free gift. Don't navigate away from that screen. Just pick something because that is a one time deal and you never see that screen again.