Wish is an American online e-commerce platform founded in 2010 by Peter Szulczewski (CEO) and Danny Zhang (former CTO).
Known as the “American version of Pinduoduo,” Wish focuses on selling low-priced, unbranded goods, gaining popularity in the American down-market.
By 2018, Wish’s download numbers had surpassed Amazon, ranking it first among global shopping apps; by the end of 2020, Wish had over a hundred million users and successfully went public.
However, looking at the market value from 2016 to the present, Wish has been experiencing losses for seven consecutive years, with its market value shrinking by 99% compared to its peak.
Throughout 2023, Wish’s Gross Merchandise Volume (GMV) was only $2.1 billion—99.8% short of their trillion-dollar dream.
What exactly happened that led to Wish’s decline?
Rise and Fall
Wish was launched in 2013, two years earlier than Pinduoduo.
In targeting the budget-conscious market segment, Wish set its average purchase price at a mere $20, far below that of Amazon and eBay. The platform’s bestsellers often include “1+1” deals, where the item and its shipping fee cost just $1 each. As many as 75% of Wish’s customers confess their fondness for inexpensive finds.
Founder Szulczewski once cited Federal Reserve data showing that 41% of American households could not come up with $400 in cash; thus, creating an e-commerce platform for those who can’t afford a $120 Amazon Prime membership is an undeniable duty for Wish.
Wish significantly reduced the entry costs and barriers for small and medium sellers: the platform does not charge a store opening fee or require a deposit, and sellers can list products simply by providing an ID card.
The outcomes are highly significant.
In 2018, Wish’s download numbers surpassed Amazon, becoming the most downloaded shopping app globally, with sales climbing to the top three in the US.
In 2019, the number of Wish sellers exceeded one million, with 94% coming from China, including 27% from Guangdong.
In 2020, Wish’s monthly active users officially exceeded one hundred million.
However, lowering the barriers to entry for sellers also quietly exposed potential risks during this process.
During the pandemic in 2021, the U.S. e-commerce market grew by over 26%. Wish wanted to make a big splash, but the results were unexpected： Annual revenue was only $2.085 billion, an 18% decrease year-on-year, and user retention declined.
Many sellers with bad records sent fake goods or even empty packages. French authorities had conducted multiple investigations on Wish, finding that 95% of the products sampled did not meet legal standards, with 45% of toys and 90% of electrical appliances even being dangerous, making ordering from Wish as thrilling as opening a mystery box. In 2020, France directly excluded Wish from its domestic market.
A Poorer Strategy
Facing criticism from users and regulators, Wish resorted to a misguided strategy: increasing penalties. While fining for violations is justifiable, the issue arises from Wish’s reliance on fines as a substitute for management.
On the one hand, fines still need to eliminate the presence of sellers with imperfect records. Once fined, these sellers quickly use another identity to open new accounts, continuing to exploit the system.
On the other hand, Wish struggles to define the boundaries in its penalty system, inadvertently harming many law-abiding sellers—sellers are penalized for receiving negative reviews due to slow logistics; sometimes, even listing products at too low a price can lead to inexplicable fines.
By early 2019, Wish was bringing in $3 million a month just from fines.
With the platform’s unpredictable penalty standards and sellers often needing more recourse for appeal, a 2022 survey among cross-border sellers revealed that only 20% remained on Wish, while as high as 35% had chosen to leave.
A survey of over 16,000 Wish users found that 23% of respondents claimed the products received were far from what was expected. The proliferation of negative comments on social media further accelerated the decline in user retention and activity.
By the end of 2022, Wish first saw its monthly active users plummet to just 20 million, followed by an 80% decrease in marketing expenses, ultimately leading to a 73% crash in overall revenue and a yearly loss of $384 million.
Final Stop-Loss Strategy
In February 2022, Wish canceled self-registration for sellers, began implementing an invitation-only system, and introduced the “Wish Standards” program, which evaluates merchants based on product quality, customer reviews, refund rates, and other dimensions for traffic distribution.
Wish’s strategy is clear: by launching the invitation system, it blocked the influx of low-quality sellers; the “Wish Standards” program, on the other hand, could weed out sellers with poor user experiences.
Yet, this could not counteract the gravitational pull of Wish’s downward spiral. In the third quarter of the 2023 financial report, Wish’s quarterly revenue was only $60 million, less than half of the same period last year, and the platform’s monthly active users, which it relied on, had dwindled to 11 million.
After years of high marketing expenditures turned to zero, the parent company of Wish chose to cash out and exit, which became the final means of cutting losses.
Wish’s decline stemmed from poor product quality, long shipping times, and regulatory challenges. Focused on low-cost items, it struggled with consumer trust and compliance issues, failing to keep up with competitors offering higher-quality goods and faster delivery. Despite efforts to improve, Wish could not reverse its loss of users and market position, leading to its downfall.
Since its inception, Wish has continuously bet on trends like mobile e-commerce, recommendation algorithms, the down-market, and social media traffic. However, the final victor was Temu（a cross-border e-commerce platform launched by Pinduoduo.)
The lessons learned from Wish’s experience may serve as a reference for other cross-border e-commerce businesses.