> Historically, our merchants in China have benefitted from lower shipping costs due to the Universal Postal Union Treaty (“UPU”). Certain expected changes to UPU postal rates that went into effect in July 2020 are likely to increase the shipping rates our merchants incur to ship products from China. The actions we have taken in our logistics program to mitigate these increased costs may not be successful over the long term. If there are increases in shipping costs, the sales price of products on our platform could increase, which could reduce the volume of transaction activity on our platform to decrease and may consequently have a negative impact on our results of operations.

The S1 talks a lot about their logistics platform and diversifying their merchant base to come from different countries, instead of just China - and rightfully so, since until July Wish’s business was subsidized by the Universal Postal Union treaty. Thanks to the UPU, Before July it was cheaper to mail a package to Chicago from Shanghai than to shop to Chicago from Dallas.

This has now changed and so the era of cheap shipping from China is over. It’s unclear how much their logistics platform mitigates the new costs, but interesting that they had to go out and build their own fulfillment and cross border carrier services to mitigate.