Amazon rival Wish tanks on Wall Street debut despite online shopping boom

Footballer Gareth Bale has promoted Wish

Shares in Wish tanked on their Wall Street debut on Wednesday, wiping $1.7bn (£1.2bn) off the e-commerce app’s market value and bringing a disappointing end to a bumper year for tech floats. 

The San Francisco-based unicorn’s sliding valuation provided light relief after several wild weeks of inflated technology valuations, and signaled that retail investors’ frenzied demand for tech shares is waning. 

Loss-making Wish priced its shares at $24 on Tuesday night, giving it a valuation of just over $14bn. 

However, the stock began trading at $21 a share — 12pc lower than the price at which the company had raised $1.1bn the day before. Its share price slipped 16.46pc through Wednesday trading on the Nasdaq, to close at $20.05.

Rajat Rajat Bahri, chief financial officer, told The Telegraph: “It is a long journey for all of us and ultimately the markets balance themselves out over time and rewards the companies that have a good performance, so we are focusing on performing well and earning the trust of investors". 

The disappointing start comes in a year that has seen more money raised in listings than any since the financial crash. 

Last week Airbnb became the biggest company to double its value on its first day of trading when shares started trading, leaving it worth more than $100bn. In the same week, food delivery company DoorDash rose 85pc on its debut. 

The blockbuster listings had led investors to hope Wish might follow in the footsteps of fellow Silicon Valley tech companies. 

Founded by now-billionaire Peter Szulczewski, a Polish-born former Google engineer, Wish follows a similar business model to Chinese giant Alibaba’s ecommerce site AliExpress. 

It has adopted the Asian trend of interactive shopping, offering spot discounts, sweepstakes and prizes for encouraging new friends to join. Wish claims to have 108m users a month and made $1.9bn in sales in 2019. Most of its merchants are based in China. 

Wish is focused on emerging markets like the Middle East, Africa, South America and Eastern Europe, and connects shoppers with lower budgets to merchants who offer lower prices but longer wait times.

Mr Bahri said it was committed to keeping prices low and that its customers were happy to wait longer “to pay €2 less”. 

British consumers are becoming increasingly wary of cheap items from countries where labour laws are less stringent than the UK, with criticism over the rise in “fast fashion”. 

When asked whether Wish could ensure merchants and manufacturing workers were treated fairly, Mr Bahri said it was a "fair point" but that merchants made "good profit" on their products. 

"We have very strict policies against merchants and have a very good feedback loop so that any bad behaviour from our merchants is extracted and penalised," he added.