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Shopping app Wish building an empire on $2 sunglasses to rival Amazon, Walmart

The startup reveals that it hit over $1 billion in revenue for the first time in 2017 and expects to double that this year.

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A screenshot of Wish's website, which is filled with ultra-low-priced items like a three-piece suit for $21 (plus $9 shipping).

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If you log onto the Wish app, you can buy dress shoes for $15, a watch for $3 or a 2-terabyte flash drive for $10.

Peter Szulczewski, CEO and co-founder of Wish, is hoping to turn those dirt-cheap prices into a sales empire to rival Walmart. And he has the numbers to suggest that's not such a crazy idea.

In an interview with CNET, he revealed a series of eye-popping figures about the discount online retailer. He said his San Francisco startup for the first time hit over $1 billion in revenue last year and has more than doubled revenue every year since its inception eight years ago. He added that "it looks like we will again" double revenue in 2018.

Szulczewski also said Wish hit 75 million monthly active users this April, has over 1 million merchants on its site and offers a selection of over 200 million items. The company expects to ship over 1 billion items this year. Plus, Wish is sitting on a war chest of over $1 billion in funding. In comparison, eBay has 171 million active buyers and Amazon has 2 million merchants, though both have staffs significantly larger than Wish's small team of about 500 employees.

"I think a lot of people underestimated us: investors, Silicon Valley. I think people misunderstand the demographics of this country and places like Europe," Szulczewski said, referring to the millions of shoppers who need to buy on the cheap.

Wish made its name by selling clothes, electronics and beauty products directly from Chinese manufacturers at rock-bottom prices. It sets such low prices by selling unbranded items, cutting out middlemen and offering shipping that can take several weeks. Wish makes money by taking a cut of each sale merchants make on its app, though Szulczewski declined to disclose the total value of all the goods sold on Wish.

The startup is now the No. 1 Android shopping app in the US and nearly 40 other countries, and it's valued at roughly $8 billion. Cementing its high-flying status, the company last year signed a multimillion-dollar deal to get its logo on Los Angeles Lakers jerseys.

The new LA Lakers jersey with the Wish logo on one side of the chest, opposite the iconic Nike swoosh.

The new LA Lakers jersey with the Wish logo on one side of the chest, opposite the iconic Nike swoosh.

Kevork Djansezian/Getty Images

Wish is among just a handful of e-commerce upstarts that are positioned to offer serious competition to Amazon, which dominates online shopping in the US. Jet.com raised a boatload of funding and invited a ton of hype, but was soon sold to Walmart for $3.3 billion. Now it's up to companies such as Wish, sports-focused Fanatics, wholesaler Boxed and a few others to offer new online alternatives.

Wish targets its wares toward lower-income shoppers, providing them an entry point to join the e-commerce trend, albeit without the speedy deliveries or top-shelf selection of Amazon. There's growing competition for that market, though, with Walmart expanding its online presence and Amazon creating more services for people receiving government aid.

Szulczewski, a former Google engineer, said he plans to stay focused on lower-income shoppers, arguing that they make up a huge and underserved market. He plans to win over those customers by building more warehouses and logistics operations to speed deliveries, making the app more personalized for each shopper, and expanding selection of distressed or older model brand-name items. Unlike Amazon, he also plans to never charge a subscription fee.

"We want to become the default platform that consumers go to — specifically value-conscious consumers — in a way that Walmart has become for a lot of people," he said.

Pointing to Wish's push for more variety and quality, he said two of the fastest-growing categories for Wish are now branded electronics and furniture.

Wish's business has been far from perfect, though. Customers have routinely complained about knockoffs and counterfeits on the app, broken or incorrect orders, and a lot of low-quality, junky products.

"Some of these criticisms are valid," Szulczewski said. "This is something that we're addressing head-on. It's critical to get the consumer feedback" to promote the best stuff and remove knockoffs.

The company also raised about $1.3 billion in funding, according to Crunchbase, but hasn't spent most of it. Szulczewski said he plans to use the funding to build out more logistics operations, but conceded that he "failed" to move faster to expand Wish's infrastructure and hire more people.

"We're trying to spend this money," he said, later adding, "I've made mistakes sometimes in scaling up my teams."

Despite those issues, Szulczewski said he sees a bright future for Wish if it can overcome its challenges.

"We can build the next generation of Walmart and an Alibaba," he said, "probably within the next 10 years."

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