Wish cabbage price to sell itself
It turns out that the joys and sorrows of human beings are not the same. At the same time that Pinduoduo's overseas version of Temu angrily smashed tens of millions of dollars to re-enter the Super Bowl advertisement in the United States to frantically harvest new users, the opponent Wish announced that it could not hold on and decided to sell itself to survive.
Wish, once a low-cost top-notch company known as the "American version of Pinduoduo", recently announced Wish's parent company, ContextLogic IncPlans to about 1US$7.3 billion in cash to provide the majority of its operating assets and liabilities** to Qoo10, an Asian e-commerce group.
Source: Screenshot from Wish Merchant Platform***
And with 1$7.3 billion is also considered a broken bone,That's about 99% lower than Wish's peak valuation of $14 billion at the time of its IPO in 2020.
According to the announcement, after the transaction is completed, Wish will still retain its listing status and retain the Wish brand and platform, and investors can still trade its **.
However, for platform merchants, the details of the integration of the two platforms have not yet been determined. Subject to shareholder approval, the transaction is expected to close in the second quarter of 2024.
After the news was announced, ContextLogic's stock price fell by 39 on the 12th11% to 6$26 shares, market capitalization 1$500 million.
Founded in 2010, Wish was initially positioned as a technology services company for mobile advertising. It wasn't until 2013 that Wish entered the e-commerce field, mainly "ultra-low" small items, such as watches, sneakers and jewelry, and most of the platform sellers came from Asia.
In addition, compared to Amazon, Wish is positioned as lower-middle-class consumers outside of U.S. cities, who may not be able to afford the $119 per year Amazon Prime membership fee.
The low-end consumer market targeted by Wish is huge. According to its prospectus, 44% of American consumers and 85% of European consumers have a household income of less than $75,000. With the exception of China and India, it is estimated that more than 1 billion households worldwide have incomes below $75,000.
However, there is still a gap between the ideal and the reality. In 2020, Wish landed on the NASDAQ, but it suffered a break on the first day of listing.
Subsequently, Wish did not usher in a new growth inflection point, but was deeply mired in the dilemma of market value diving and performance. In 2021, Wish's annual revenue was $2 billion, down 20% year-on-year;
Wish's annual revenue for 2022 is 5$7.1 billion, down 73% year-on-year, even lower than the 2016 revenue level, net loss increased to 3$8.4 billion.
And in the financial report for the first quarter of 2023, Wish reported $98 million in revenue, down 49% year-over-year and 87% from two years ago; Net loss was $89 million;
Revenue for the third quarter of 2023 was $60 million, down 52% from 2022 and less than the $78 million revenue in the second quarter of 2023, marking the seventh consecutive year in the red.
In terms of users, according to a statistical report by BusinessOfApps, Wish's monthly active users have dropped significantly in recent years, from 90 million in 2021 to 27 million in 2022.
As of early 2022, monthly active buyers on the Wish app are down 74% from their peak in 2020. Quarterly monthly active users have also fallen sharply** from the third quarter of 2021 to their lowest level since 2019.
Wish quarterly active users from 2019 to 2023 (unit: millions) Source: AMZ123
The number of Wish sellers is also declining significantly, with around 600,000 merchants selling on its platform in 2021. It removed a lot of merchants in 2019 due to fakes or counterfeit goods.
Wish merchants from 2018 to 2021 (unit: millions) Source: AMZ123
In addition, Wish also publicly announced two layoffs in 2023, involving a total of more than 400 employees, and the company has fewer than 500 employees.
In addition, the management has also been replaced, in February 2022, the founder of Wish stepped down, the company changed its CEO twice in a year, and Joe Yan (grim), the operating partner of GGV Capital, has been the CEO since September 2022.
Why Wish was abandoned
Low-price sales + social networking is an important way for Wish to open the sinking market, and Wish once became the world's largest shopping app, and it was once unlimited.
But low prices are a double-edged sword, in order to attract more sellers and users, Wish has relaxed the entry requirements for merchants, so that many sellers are rushing to Wish.
Sellers of mixed quality brought goods of varying quality, resulting in a decline in the quality and reputation of the platform's products, and users fled one after another.
In addition, sellers are also constantly complaining about the Wish platform, with high fines, frequent account bans, frozen funds, and a sharp decline in traffic, which make sellers miserable.
In 2020, France began to focus on "selling fake goods" and "false advertising" on the Wish platform.
At that time, DGCCR purchased more than 140 products from Wish at one time (most of which were not sold by local sellers in France) and tested the products. The data shows that most of Wish's products did not meet the regulatory requirements at that time.
On November 24, 2021, France** officially ordered Wish to withdraw from the French market due to the fact that most of the products on Wish** contain dangerous ingredients.
In the more than a year since leaving the French market, Wish's search traffic and platform sales in the European market have declined seriously. It wasn't until March 23023, after paying the 3 million euro fine, that Wish was able to return to the French market.
Of course, Wish also thought about saving herself. In November 2021, Wish announced the launch of the Wish Standards program to incentivize more premium merchants and increase customer trust.
Since 2022, Wish has not only changed its logo, but also made efforts to continue to invest heavily in various aspects such as app application, marketing, and services.
Although some of Wish's changes have been slightly effective, they have gone from bad to worse, and these measures have been irreversible.
Temu, Shein, etc. are impacting the market pattern
Previously, Joe Yan, CEO of Wish, and Vivian Liu, Chief Financial Officer and Chief Operating Officer, both believed that changes in the competitive landscape and intensified competition in the industry have brought unprecedented pressure to Wish.
Wish, along with Amazon, eBay, and AliExpress, was once listed as one of the world's top four largest shopping**, and today's market competition landscape has changed dramatically. Temu, Shein and TikTok Shop continue to impact the original pattern, and are known as the "Four Tigers of Going to Sea" together with AliExpress.
According to the 2024 Mobile Market Report, in 2023, Shein will once again win the global shopping APP volume champion, with Temu and AliExpress ranking second and ninth respectively in the 2023 shopping APP volume. Wish's marketplace is constantly being squeezed.
Source: E-commerce News.
Temu and Shein both follow a low-price strategy, and they are also sparing no money in marketing. In the month of its launch, Temu's budget for public domain traffic acquisition and content-based advertising reached 1 billion yuan, and the budget is expected to exceed 7 billion yuan in 2023.
At the same time, Temu and SHEIN intend to lay out the global market, while Wish only focuses on the European and North American markets.
Both are low-cost players, and a big difference between Temu and Wish is that it is directly supplied by the merchant and the platform is responsible for sales. Therefore, temu also has a high degree of control over merchants, and firmly controls the platform's lowest price advantage through the nuclear price policy.
In addition, temu will launch a "semi-managed" service in addition to the "fully managed" model. The first phase of temu's semi-hosted business is scheduled to launch on March 15 this year in the United States, and will be expanded to major European sites by the end of the month.
Through the semi-custody model, Temu attracts high-level sellers with inventory overseas, which is more helpful for some merchants to deal with unsalable and low-cost inventory, and improves the efficiency of product circulation.
It is understood that Qoo10 is an e-commerce platform based in Singapore, with business in many Asian countries, including Indonesia, Malaysia, Japan, Hong Kong, Singapore and China.
In addition, Qoo10 has accelerated its expansion by acquiring e-commerce platforms, such as TMON, Interpark, WemakePrice, etc.
According to information from a third-party research agency, although Qoo10 once claimed to be "Singapore's largest e-commerce", its current market share is very low and it is not listed in the ranking of e-commerce platforms in Southeast Asia.
With the acquisition of Wish, Qoo10 is about to sprint to the North American market, after all, Wish has a far-reaching influence in North America.
At present, it is still unknown whether the acquisition of Wish will compete fiercely with Temu, TikTok and Shein.
Author |Li Ying.