According to an official announcement from Wish, the acquisition of Wish by Qoo10 was completed on April 23rd local time. Qoo10 now owns and operates the Wish platform and all ContextLogic subsidiaries related to the Wish e-commerce platform.
The announcement states that Wish will gradually open integration channels to all merchants. After integration, merchant products will be able to be displayed and sold on both Wish and Qoo10 platforms.
From its golden era with a towering market value of $14 billion to being acquired today for a mere $173 million, Wish’s journey is truly a tale that evokes sighs. Let’s explore what exactly happened.
Wish’s Rapid Growth and Steep Decline
Wish was founded in 2011 in the United States by engineers Peter Szulczewski and Danny Zhang from Google and Yahoo. The company, headquartered in San Francisco, initially started as a technology service company centred around algorithms, offering only commercial advertising services to clients. It wasn’t until 2013 that Wish transitioned to an e-commerce platform, entering the field of cross-border e-commerce.
Wish is characterized by its algorithm-based personalized recommendation system, which can accurately push relevant product information based on users’ shopping habits and preferences. The platform is primarily mobile-based, with 97% of orders coming from mobile devices, and is known for its highly low-priced goods sold by Chinese manufacturers.
Co-founder Peter Szulczewski once stated that shoppers are willing to accept delivery times of several weeks in exchange for low base prices. Relying on a range of household goods, clothing, electronics, and toys from Chinese manufacturers priced at just a few dollars, Wish has attracted a significant portion of lower and middle-income consumers, with low prices being its most significant advantage.
Using ultra-low prices, personalized algorithms, and social media-driven traffic as its winning strategies, Wish became the world’s most downloaded shopping app at one point.
In 2020, Wish’s revenue doubled to $2.5 billion, and it went public on the NASDAQ with a market value of $14 billion.
However, post-IPO, more and more problems emerged. On the one hand, the substantial marketing costs generated by social media-driven traffic gradually dragged down Wish’s profits. On the other hand, the prevalence of low-quality products and rampant vicious competition under the low-price model led to its gradual abandonment by consumers.
Meanwhile, declining traffic, dwindling profits, and competitors like TEMU and SHEIN, who also employ a high-cost-performance strategy, caused many sellers to lose faith in Wish and opt to leave. Data indicates that Wish’s active user count dramatically fell from 90 million in 2021 to just 11 million by the end of 2023.
Facing challenges and worsening performance, Wish has attempted self-rescue measures, including cutting costs, raising seller standards, and reducing its market presence. However, these efforts have yielded less than ideal results.
In 2021, Wish’s annual revenue fell by 20% year-on-year to $2 billion. The following year saw a further decline, with revenue dropping 73% to $571 million and net losses expanding to $384 million. In 2023, revenue continued to decline, reaching $86 million, a 61% drop from the previous year, with net losses amounting to $68 million, perpetuating the downward trend seen over the past two years.
Qoo10’s Strategic Acquisition of Wish
Qoo10 is a privately owned e-commerce platform headquartered in Singapore, operating localized online transaction platforms across Asia. Like Wish, Qoo10 is dedicated to providing a rich product selection and enjoyable shopping experience. The Qoo10 Group operates several global websites such as Qoo10.com, Qoo10.sg, TMON, Wemakeprice, and InterPark, covering markets in Singapore, Korea, and the United States.
With platforms like Temu centred around low-cost offerings rapidly emerging in recent years, many e-commerce giants still see profitable opportunities in lower-tier markets and have begun to strategize accordingly. The acquisition of Wish by Qoo10 is speculated within the industry to be a move in this direction.
Qoo10 likely targeted Wish for its substantial presence in lower-tier markets. Compared to first and second-tier cities, Wish has a vast user base and faces relatively less competition in these lower-tier markets, presenting opportunities for entry and expansion. Additionally, consumers in these markets have diverse needs, are sensitive to prices, and seek cost-effective products, aligning well with Wish’s low-cost product strategy.
On the other hand, this acquisition is part of Qoo10’s strategy to accelerate market expansion and increase its international influence. Before acquiring Wish, Qoo10 had already acquired several Korean e-commerce platforms like Tmon, Interpark, and WeMakePrice. These platforms, like Wish, had once thrived in their respective markets but eventually faced declining market shares due to losses, yet they still have significant brand recognition and market foundations.
For Qoo10, acquiring these platforms means accessing their user bases and merchant resources. Leveraging some of their strengths can enhance the operational efficiency and user experience of Qoo10’s platform, which is more advantageous than expanding into new markets without any established foundation.
Summary
The acquisition of Wish by Qoo10 not only marks a new phase for Wish’s operations but also, with the support of Qoo10’s resources and technology, promises improvements in supply chain management, product quality, and more effective marketing strategies to enhance customer experience.
Additionally, Wish’s extensive presence in lower-tier markets and Qoo10’s international strategy may bring new growth opportunities for Wish. This integration is expected to enhance Wish’s competitiveness in the market, enabling it to better compete with other e-commerce giants, especially in price-sensitive segments.
Moreover, Wish’s experience serves as a cautionary tale for the industry, demonstrating that a static and chaotic ultra-low-price model is not sustainable in the long term. Imposing rules that exceed sellers’ capabilities can drive them away. These insights are critical for the future development of platforms like Temu and other similar platforms, which need to strike a better balance between low-price strategies and quality control.