An Amazon worker delivers packages amid the coronavirus disease (COVID-19) outbreak in Denver, Colorado, U.S., April 22, 2020.
Kevin Mohatt | Reuters
Amazon is pushing holiday shoppers to retrieve their own packages from brick-and-mortar retail locations and neighborhood “hubs,” as it braces for a surge in online orders.
The company said in a statement Monday that Amazon shoppers nationwide can now get their gifts delivered to one of its physical bookstores, called Amazon Books, or an Amazon 4-star location.
Amazon also highlighted its network of contactless pickup points, referred to as Amazon Hub, as an “alternative delivery location” for holiday orders. Hub locations refer to Amazon’s network of self-service kiosks and manned pickup counters, located inside or near local shops, as well as in residential apartment buildings.
Amazon said it was offering shoppers new ways to pick up their packages as a means of keeping their holiday season “spoiler free.”
“This year many customers and their families are opting to stay home so the challenge of keeping those special gifts under wraps from family, friends or loved ones is going to be greater than ever,” John Felton, vice president of Amazon’s global delivery services, said in a statement.
But it could also benefit Amazon in other ways. By pushing shoppers to have their orders sent to Hubs and brick-and-mortar stores, Amazon can cut down on the number of last-mile delivery trips that are necessary. The last-mile is an especially labor-intensive and expensive step in the delivery process.
To that end, Amazon also pointed shoppers to its “Amazon Day” delivery option, which allows them to pick a day of the week to receive all of their orders, cutting down on the number of boxes and deliveries. It reduces the number of trips Amazon has to make to a single address.
Amazon will likely need all the help it can get when it comes to deliveries this holiday season. For months, large shippers such as FedEx and UPS have been warning of a potential capacity shortfall, as the pandemic-induced surge of online shopping, coupled with the holiday peak, leaves them struggling to keep up.
Online sales this holiday season are expected to spike 33% year-over-year to a record $189 billion, according to Adobe Analytics.
Amazon is also managing tight capacity inside its warehouses after experiencing months of peak online ordering activity due to the pandemic. The company encouraged consumers to start their holiday shopping early in anticipation of the delivery crunch. Amazon kicked off its holiday deal season in late October, a month earlier than usual, following a delayed Prime Day.
E-commerce marketplace Wish filed its IPO prospectus Friday, and gave investors who may be concerned about an overreliance on China plenty of reasons to be skeptical.
Wish, founded in 2010, is an online marketplace that features a variety of discounted goods, ranging from cheap homewares and apparel to electronics and toys. The app offers a slew of products for just a few dollars as a way to target low- to middle-income consumers with more affordable options than they can find on other sites, including Amazon.
The company, valued by private investors at $11.2 billion, is able to keep prices low, in part, by sourcing most of its products from sellers in China. Wish doesn’t break down what portion of its more than 500,000 sellers hail from the region, but Marketplace Pulse previously estimated that 94% are based in China, with the remaining 6% coming from the U.S., U.K., Canada and India.
“We initially grew our platform focusing on merchants in China, the world’s largest exporter of goods for the last decade, due to these merchants’ strength in selling quality products at competitive prices,” the prospectus says.
Amazon and Walmart also have a growing share of China-based sellers, but they’re not as reliant as Wish on Chinese merchants. Wish’s prospectus spells out a number of risks tied to its concentration in China.
Marketplace revenue fell 8% in the first quarter from the prior year due to the initial outbreak of Covid-19, which caused “severe manufacturing and supply disruptions.” The business bounced back, growing 67% in the second quarter, before moderating to 33% growth in the third, in part because of continued “disruption in the global logistics network.”
Changes in postal subsidies could hurt the company in other ways going forward. Wish has long benefited from an agreement between the U.S. Postal Service and China Post, the official postal service of China, which allowed packages weighing 4.4 pounds or less to be shipped more cheaply to the U.S. than what it would cost to send them between U.S. states
In July, the Universal Postal Union, an agency of the United Nations, ended the subsidy and set higher rates on inbound mail from China. To make up for the increase, Wish’s Chinese merchants could be forced to raise the price of their products, the filing says, undermining one of the company’s key advantages.
Wish’s reliance on Chinese merchants also leaves it particularly exposed to U.S.-China trade relations, which turned overtly hostile during President Donald Trump’s tenure. If the U.S. imposes new tariffs on Chinese imports, Wish sellers could have to raise prices on their products.
The company cited recent U.S. threats to impose tariffs on $500 billion of imports from China as a specific risk.
“Further escalation of trade tensions between the United States and its trading partners, especially China, could result in long-term changes to global trade, including retaliatory trade restrictions that restrict the international flow of products,” the prospectus says. “Any alterations to our business strategy or operations made in order to adapt to or comply with any such changes would be time-consuming and expensive, and certain of our competitors may be better suited to withstand or react to these changes.”
Wish said it’s taken steps to geographically diversify its merchant base. In the last year, the company has added more merchants from North America, Europe and Latin America. U.S. merchants have grown 268% since 2019.
The company has also been investing in its own logistics offerings and partnering with third-party carriers for cross-border shipments. Additionally, it’s expanding its array of private label products, which are items that are created or purchased wholesale by Wish and sold on its platform.
E-commerce marketplace Wish filed its IPO prospectus with the Securities and Exchange Commission on Friday, joining a number of technology companies that have looked to debut before the end of the year.
Wish’s parent company, ContextLogic, plans to list its shares on the Nasdaq under the symbol WISH. The filing provides the first look into Wish’s financials after the company confidentially filed to go public in August.
Wish, founded in 2010, is an online marketplace that features a variety of discounted goods, ranging from cheap home wares and apparel to electronics and toys. Compared to Amazon, Wish is targeted to shoppers of “every socio-economic status” who might not be able to afford $119 a year for Prime.
“We built Wish to serve these consumers who favor affordability over brand and convenience, and are being underserved by traditional ecommerce platform,” the filing says.
In general, the company is showing moderate growth without skyrocketing losses. Wish reported $1.75 billion in revenue for the nine months ended Sept. 30. That’s up from $1.33 billion during the same period last year, a growth rate of 32%. However, revenue grew only 10% between 2018 and 2019.
The company’s bottom line has been fairly stable — it lost $247 million in 2017, $208 million in 2018, and $136 million last year. In the first nine months of 2020, it lost $176 million.
Wish said it now counts more than 100 million monthly active users in over 100 countries, up from its previously reported total of 70 million monthly active users. More than 500,000 merchants are signed up to sell on the platform and it has grown its catalog to 150 million items, Wish said in the filing. Most of its merchants are based in China, but it added more sellers from the U.S. to its platform in 2019.
Wish is going public at a time when e-commerce has gotten a shot in the arm from the coronavirus pandemic. Like many retailers, Wish said it experienced longer delivery times, supply chain disruptions and the loss of some merchants on its platform at the height of the pandemic. However, it said it also benefited from greater mobile usage and less competition from brick-and-mortar retail due to lockdowns.
Airbnb, DoorDash, Roblox and online lender Affirm have also filed to go public in the past week, taking advantage of a post-election rally in U.S. stocks and investor demand for high-growth tech names. The companies are trying to hit the market in the period between Thanksgiving and Christmas, people familiar with their plans told CNBC last week.
— CNBC’s Ari Levy contributed to this report.