Business
The Rise and Fall of Wish, the Walmart of Ecommerce
Donald Trump won the presidential election on November 8th, 2016. On December 2nd, Wish’s then-CEO, Peter Szulczewski, offered his (highly anticipated, no doubt) two cents on the win.
In a Medium op-ed titled “The Invisible Half,” Peter argued that the election shocker was a vindication for Wish’s business model. Just like Trump, he opined, Wish had been turned away by Menlo Park fat cats out of touch with the “value conscious consumers” Wish targeted.
He stopped short of saying that he and Trump targeted the same audience. Still, it was a bold statement that could only come out of a time of great upheaval. Now, just as the “Trump train” went off the rails, Wish faces a rude awakening.
How it all started
Prior to founding Wish’s parent company, ContextLogic, Szulczewski worked as an engineer at Google for several years. He left in 2009 and took six months to code an ad recommendation platform that predicted people’s interests based on their browsing behaviors. Sound familiar?
ContextLogic launched in 2010 and garnered $1.7 million from investors—with the help of Yelp CEO Jeremy Stoppelman. What did they do? At the outset, they offered the ad software that Peter coded. According to Forbes, investors weren’t wild about ContextLogic’s business plan, but they loved the tech.
Still, ContextLogic didn’t really know what kind of company it wanted to be. It was only when Szulczewski brought on Danny Zhang—his old friend from college—as cofounder that the wheels started to spin.
In a meeting with investors, Peter and Danny unveiled a new plan: ecommerce. At the time, Amazon had already been running the game for upwards of a decade, and the ecommerce field was seen as a nonstarter.
In 2011, Facebook offered $20 million to integrate ContextLogic into its own system. Peter turned it down, to the chagrin of some investors, but for better or worse, that decision is what gave us Wish.com.
A Wish come true
Have you ever wondered why the ecommerce platform is called Wish? Well, back when it launched as Wishwall.me in 2011, it was more of a wish list than a shopping site. Using Facebook ads, it invited people to browse products and select what they wanted—but not actually buy them from the site.
This all turned out to be part of the plan. Once they got a solid user base, they went to vendors off of eBay and Amazon. They promised ready buyers, but only if sellers provided their stuff at a discounted price.
Wish’s strategy of targeted ads and discounted deals helped them grow consistently throughout the 2010s. Once they started selling on-site in 2013, they noticed that most of their sales were coming from Florida, Texas, and Middle America.
This defied the conventional wisdom that tech-savvy urbanites made the most use of ecommerce. It’s why Vox labeled them “the next Walmart” in 2015. Their discounted, third-party goods appealed to people who couldn’t afford what Amazon and other online retailers offered.
The highs and lows
It’s not hard to see how Wish’s rise mirrored the early “what just happened?” narratives of Trump’s victory. One thing Wish and Trump definitely have in common: their times on top were equally turbulent.
In 2017, Wish was the most-downloaded ecommerce platform in the US. In 2018, itt was the most-downloaded in the world. They signed a lucrative multi-year deal with the Los Angeles Lakers, they ran a World Cup campaign soon after, and their valuation soared into the billions.
At the same time, the higher Wish’s profile got, the more it became associated with shoddy experiences. Horror stories started to mount about people receiving products that were nothing like their photos… if they ever received them at all.
The New York Times reported that these mishaps weren’t always by accident. Fake stores and rip-off contests were operated by the company as “experiments” to see whether customers would complain. Wish became content creator shorthand for hilariously bad bootleg products.
And that’s when things were good.
Wish’s descent into chaos
In a way, it’s surprising that Wish fell as far as it did in the early ‘20s. If any industry wasn’t steamrolled by the pandemic, it was ecommerce.
Things started out strong; Wish continued to grow at the onset of COVID-19 and even went public in 2020, valued at $24 a share. The thing is, the more prominent it got, the more complaints grew.
They came under fire for targeting explicit ads at children. Cries of copyright infringement and false advertising led to hundreds of complaints to the Better Business Bureau.
In 2021, Wish’s valuation fell 82%. Today, you can buy Wish stock for less than $2, the sort of steep discount you’d expect to find on their app. Peter resigned suddenly in 2021; internal reports say he all but vanished from the office once Wish went public. The new CEO, Vijay Talwar, is still in the process of recovering the brand.
What happened?
The way Wish tells it, they struggled due to rising costs of ads that forced them to scale back their marketing. Wish is, after all, primarily a marketing business model. Targeting ads to consumers based on their history came first; the ecommerce site was an afterthought.
Truth be told, maybe Wish’s business model was doomed to start with. The initial idea was cool, sure, but outsourcing commerce to third parties offering steep discounts is already precarious, and Wish seemed quite willing to dig into it.
There is one other reason. You see, a big part of the reason Wish’s products could come at such steep discounts is because of a peculiar postage deal between the U.S. and China. A 2011 agreement allowed packages of 4.4 pounds or less to be shipped to the U.S. from China for less than the cost of shipping between states.
In 2018, Trump announced his intent to withdraw the U.S. from the Universal Postal Union. Postal agreements with China categorized the country as developing, which he felt gave them an unfair advantage. One year later, a new deal was struck, keeping the U.S. in the Union and making it more costly to ship goods from China.
However you feel about that decision, it certainly didn’t help Wish. Szulczewski said at the time that Wish had a plan in place anticipating this change. But if you look at Wish’s rise and fall, both in value and in reputation, it definitely seems to line up.
That’s just one more thing that Wish and Trump may have in common: the person who caused their downfall.
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Graphic design is a huge part of managing an ecommerce business. It attracts prospects and website visitors, builds a strong brand identity, and establishes authority and credibility. If you want your brand to possess all these, you need to explore these five best graphic design services for e-commerce businesses:
Penji
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Flocksy
Boasting a team of designers, writers, and video editors, Flocky is an excellent option for ecommerce businesses looking for a reliable design partner. Like Penji, it delivers within 24 to 48 hours with fixed-rate pricing plans. Also included in the plans are unlimited revisions, so you can get the exact designs you need.
ManyPixels
Another graphic design subscription platform that’s built for ecommerce businesses, ManyPixels lets you send as many design requests as you can in a month. Its higher-tier plans match you with a dedicated designer to provide consistent visual assets for your online store.
Duck.Design
Whether your business is on Amazon, Shopify, or DTC (direct-to-consumer), Duck.Design is an excellent graphic design service for ecommerce businesses. It also offers unlimited graphic design services for flat monthly rates. Like ManyPixels and Penji, it delivers in 1 to 2 business days.
DotYeti
A rising start in the unlimited graphic design landscape, DotYeti is well-suited for ecommerce businesses looking for quality, fast, and affordable designs. You can send requests for infographics, packaging design, landing page designs, ad creatives, and many more.
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