The Decline of Wish...What Happened?

this video is sponsored by rocket money it's a great app I've been using to manage my money and track my expenses to get started for free simply go to rocket.com compman or click the link that is in the [Music] description wish is an internet retailer known for selling rediculously cheap merchandise primarily to lower income consumers in more than 60 countries around the world now most of these items are not name brand or incredibly wellmade to say the least but the prices are practically unbeatable and there is clearly a large market for that there was a time just a few years ago when wish was one of the fastest growing most promising companies out there articles were being published saying that it could be the next Walmart or the next Amazon in 2015 their CEO said that he believed wish would eventually become the second or third trillion doll Marketplace which I would say was a bold statement considering they only had around $50 million in annual sales at that time but just like he promised he was aggressive in trying to make that happen over the next few years wish became one of the most downloaded apps in the world growing their customer based over 100 million monthly active users by 2020 and generating more than $2.5 billion in Revenue in December of that year they raised over $1 billion with an initial public stock offering that valued the company at $14 billion a month later their valuation peaked at around $18 billion and from there everything has drastically gone downhill wish has easily experienced one of the most dramatic declines of any company over the past few years evidenced by almost any key figure that I can find their revenue has fallen from $2.5 billion down to 287 million their monthly active users has fallen from over 100 million down to 11 million and almost all of wish's value on the stock market has disappeared in early 21 it would have cost over $900 to buy a single share of stock today the price is in single digits meaning anyone who invested at the worst possible time back then has lost over 99% of their money in February of 2024 it was sold to a company in Singapore for $173 million and again I have to point out less than 1% of their Peak valuation a little more than 3 years earlier it is such a wild company so in this video I want to look at the rise and fall of Wish by explaining why they were able to grow so large and why everything has taken such a Negative turn maybe the biggest single reason behind their initial rise would be technology and for that we have to look at their co-founder and initial CEO Peter sesi he is probably one of the most confident Business Leaders that I have covered on this channel for college he attended the University of waterl in his hometown of waterl Canada his family had immigrated there from Poland when he was 11 years old after graduating in 2004 he started working at Google where he wrote code for algorithms after 5 years he quit his job at Google and started working full-time to write his own code I apologize because I could not tell you the complexities of it but he basically developed a system that was effective and using someone's browsing habits to predict the kind of stuff that they might want to buy something like that can be very valuable they called it context logic and it would go on to be the foundation that was used to build wish he actually used context logic as the official name of the company when he founded it in 2010 alongside former College classmate Danny Zang their first employees were from the math department of that college and the whole company was very much focused on technology initially they used that algorithm to build an app that essentially functioned as a wish list that's where the name comes from it would show users a bunch of items from various other websites that they would likely be interested in buying it was one of those things where the more they used it the more accurate the recommendations became and that is one of the main features that made wish so popular popular in 2013 online merchants started selling their products directly on the Wish app and those items would typically sell fast because wish was displaying them to the people that were most likely to buy them so that helped attract more Merchants to it do you see how that system developed and how the technology was the driving force behind it another reason behind their success and these are going to start moving much faster it was the fact that wish was specifically developed for mobile devices they say that over 90% of user activity and purchases happen on the mobile app that functions a bit like social media it has that addictive nature where you go and scroll through all these personalized recommendations discovering new stuff that is keeping your mind constantly stimulated More than 70% of their sales do not involve a search of any kind they come from people discovering things that have been recommended to them next up on the list would be probably the most obvious one low prices wish is practically built for people that are looking for extreme deals that aren't all that concerned with the quality of what they're buying they have been referred to as the dollar store of the internet the prices are so low because items are shipped directly from third- party Merchants most of which are in China it was estimated that 94% of their sellers are from that country so even though the company itself is from San Francisco most of the stuff you buy is coming from lower quality Chinese manufacturers finally a big portion of their success can be attributed to aggressive marketing for a while there there were one of the biggest advertis iers on Google and the biggest Advertiser on Facebook and Instagram in 2017 they made a three-year $30 million sponsorship deal with the NBA team the Los Angeles Lakers and coincidentally in 2020 wish's Peak year LeBron James and the rest of the team won the NBA Championship while they had a wish logo prominently featured on their jerseys in fact sales and marketing has by far been their biggest expense in 2020 they spent $1.7 billion on on it 96% of which was focused on acquiring new users I want to point out that these numbers are potentially concerning because they have prevented the company from turning a profit despite being so ubiquitous and promising during that year the company ended up losing $745 million the plan there much like many other companies was to spend everything they could on attracting a user base building up the business and Switching gears into profit mode later on when everything was well established but things have not gone according to that plan moving on to the decline of wish and I would say that this has been one of the more embarrassing declines starting off I feel like I have to mention the pandemic everyone was stuck inside so more people were shopping online at places like wish so the numbers match up nicely with 2020 being their biggest year and then starting to fall in 2021 after the restrictions were lifted and all of that most definitely part of the story here but I don't think it is as big of a factor as it might seem wish was steadily growing before the pandemic and felt to levels much lower than those previous levels so the numbers don't match up perfectly and there's clearly more to the story another reason behind the decline of wish is a cut back in their marketing expenses in 2021 the cost of digital advertising went way up for everybody and wish's response was to reduce the amount of money that they were spending on it but remember all of that money that they were pouring into those Instagram and Facebook ads was how they were remaining relevant and attracting so many new customers so a lower commitment to advertising led to lower sales and ultimately a scaled back operation by 2022 their logo was no longer on those Lakers jerseys their ads weren't showing up on people's social media feeds nearly as often anyway and people started forgetting about wish probably a good thing for many people because I have to ask how many of the people here have been satisfied with their experiences using wish.com because based on the reviews I have seen and their overall reputation I don't think they are very well liked having an online version of a dollar store is probably a decent idea but I don't even know if that accurately describes wish because to me anyway their standards have been so much lower than the dollar store it brings me to my next reason bad products please tell me if you think otherwise but a lot of the stuff sold on wish is simply awful I don't know how else to put it it's kind of become a thing where people started referring to any cheap imitation of something as a wish.com version like I don't know maybe you would call Mountain lightning a wish.com version of Mountain Dew the factories in China making these products have deceived a lot of people into just buying a lot of junk you might receive a lower grade version of what was advertised or the wrong color or size or maybe it doesn't work or falls apart as soon as you get it it could be an illegal knockoff or feature copyrighted material when it shouldn't wish has unfortunately become notorious for that kind of stuff it has become so bad that even at such a crazy discount people are shying away from it wish has a history of listing dangerous or inappropriate items the French government even banned them for a little bit because they violated consumer protection laws I can keep going on about this but my guess is that many of the people watching this have had a disappointing experience with wish either with receiving a bad product or for the next reason on my list unreliable shipping most of the stuff they sell is being shipped all the way from China so it could take weeks before it arrives if it ever even gets there at all people have received empty boxes or never received anything at the very least when you buy something you want to confident that you will receive it but the chances of that happening with wish are not nearly as high as you would hope and that's embarrassing right in wishes laser focus to become a trillion doll company they let a lot of things slip at the customer's expense to put it simple they should have been better at monitoring the merchants with stricter rules and more oversight and have more reliable customer service it is like they made everyone want these attractive looking products but then failed to deliver them properly the final reason on my list is is competition there have been new companies out there like shien and timu that have their differences I made a video about shien if you're interested but they are also selling ultra low priced merchandise that get shipped over from China I don't have too many new things to say about them here but as of right now they are considerably bigger than wish to summarize here in my own opinion wish has been a total disaster unless something major happens their legacy is going to be filled with upset customers a negative reputation and billions of dollars lost in total wish has lost more than $3 billion over the past decade it's unclear if they ever had a viable business model and at this point especially due to their shrinking scale it is looking unlikely that they will ever make up those losses now they have made attempts to recover their situation but it all just feels so hopeless in 2021 they started a standards program to improve product quality the following year they completely changed their branding for the first time with a new logo and new colors that same year it was big news when Peter seski stepped down from his CEO position having held it since the beginning and then only 7 months later his replacement was replaced so in 2022 wish technically had three different CEOs along with other key management changes there have been new plans and new directions at the company but none of them too effective wish continues to struggle and hasn't shown any real signs of recovery let me know in the comments what do you think about wish have you ever ordered something from them and if you have what was your experience do you see them as a great place to get cheaper lower quality merchandise or just a complete waste of time and money do you think there's any hope for wish to revive their business and what do they need to do to make that happen I realize I've been pretty harsh on the company here so let me know if you think I've been too harsh and any other thoughts you have about wish leave them in the comments I'd like to hear what you have to say rocket money is today's sponsor and I keep thinking back to when I canceled my subscription to the Wall Street Journal they made me do it over over the phone they kept asking me awkward questions about why I was cancelling and offering different rates and bundles and I just wanted out I'm sure you know these conversations all too well and that is where rocket money can help it is the personal finance app that helps you cancel subscriptions lower bills and manage your money better it'll safely and securely identify recurring charges and actually cancel unwanted subscriptions that is a great feature I'm embarrassed to admit that I learned about a $20 a month subscription that I didn't even realize I had I use it to monitor my spending by category it helps me budgets and overall I would say it's helped me gain much better control of my finances to take control of your finances simply go to rocket.com compman or click the link that is in the description thank you for watching [Music]

Channel: Company Man

Views: 314,665

Keywords: Wish, Wish.com, Company, Decline, Business, Temu, Shein, E-Commerce, Internet, Retail

Id: 05JkQ6UFfF4

Length: 12min 57sec (777 seconds)

Published: Wed May 22 2024