’s US$14 billion value at the time of its initial public offering in 2020. As Neil Saunders, managing director and retail analyst at GlobalData, noted, “Wish has been acquired for a fraction of its original valuation which shows that this is a company in deep trouble, not one that is on the front foot. This view is backed by the terrible sales declines that Wish has been posting over the past year. It has basically been losing customers hand-over-fist to rivals like Temu.” According to a statement from ContextLogic’s board chairman Tanzeen Syed, “The Board conducted a thorough review of strategic alternatives with the assistance of outside financial and legal advisors. We evaluated a variety of potential outcomes and determined that the proposed sale of our operating assets and liabilities, while preserving significant net-operating losses (NOLs), represents the best path forward to maximise value for shareholders. “The Board believes the transaction will effectively reduce the cash burn in ContextLogic to near zero, monetise its operating assets at the highest value possible and preserve significant value for shareholders. At the same time, we believe this is a compelling opportunity for shareholders to directly benefit from the approximately US$2.7 billion value of our NOLs as profitable operations are targeted by the continuing business,” Syed continued.  As Joe Yan, ContextLogic’s CEO, stated in a press release posted on Wish’s website, “Integrating the Wish platform into Qoo10 will create a true global cross-border e-commerce platform to support the massive market demand. Upon close, we expect the new Wish platform will have an improved customer experience through increased product assortment and merchant selection. And for our merchants, we will be able to offer fully integrated logistical capabilities to deliver unmatched cost-efficient services with high-quality control and transparency.” In the same release, Young Bae Ku, Qoo10’s CEO and founder, said that combining Wish’s “innovative technology that provides highly-entertaining, personalised shopping experiences” with Qoo10’s “operating expertise” would drive greater success for merchants while providing an even greater marketplace for consumers globally.  “With the acquisition of Wish, Qoo10 and Wish will offer a comprehensive platform for merchants, sellers, buyers, and customers globally to realise the potential of a truly global marketplace,” he said. “With the strong commitment from Wish’s employees and staff combined with the Qoo10 family group of companies, we are well positioned to realise our long-stated goal of being a leading cross-border, e-commerce marketplace.” ContextLogic is expected to complete the transaction in the second quarter of 2024, subject to the approval of ContextLogic’s shareholders and other customary closing conditions. Per this week’s release, Wish has about US$2.7 billion of NOL carryforwards and certain retained assets. As part of the agreement, ContextLogic will begin trading under a new ticker symbol within 30 days of the closing of the transaction. Why did Wish agree to the buyout? Wish was founded in 2010 and rose to prominence over the next decade. It was reportedly the most downloaded US shopping app in 2017 and the most downloaded e-commerce app worldwide in 2018.  However, in recent years, the e-commerce platform has been struggling.  In the third quarter of 2023, the company reported a 52 per cent decrease in revenue year-over-year, on top of experiencing a 66 per cent drop in 2022. Part of the drop in sales stems from increased competition from brands like Shein and Temu, which only launched in September 2022 and has been aggressive in its marketing. Temu is estimated to have spent between US$600 million and US$1.4 billion on ads during the first nine months of 2023.  Without teaming up with another player in the sector, the American-based Wish would likely have struggled to survive let alone compete with the likes of Shein or Temu.  Will the acquisition keep Wish afloat? However, it’s not simply a case of two heads are better than one. As Saunders noted, “While Qoo10 has bought Wish for a knock-down price, it inherits the company’s problems and issues. Wish is also very small in the context of giants like Shein and Temu, so this is not a transformative deal for Qoo10 – even if it does help them expand geographically. “What the deal does is give Wish a more stable home where it can rely on the capital and expertise of Qoo10 to help it reduce losses and grow the business. That said, I do not think this provides anywhere near a basis for challenging the likes of Temu. The deal also comes at a time when spending on ultra-cheap marketplaces might be waning as consumers come under more financial pressure.” With Shein now facing fresh opposition in its own attempts at an IPO,  time will tell if the newly bolstered Wish business figures out a way to stay ahead of its China-based competitors.