With a loss of 90 million US dollars, can Wish successfully break through by self-help?

When it comes to Wish, sellers always sigh. The once prosperous platform has turned into a miserable one now. From fines on the platform, traffic decline and freeze, to shrinking orders and logistics delays, many sellers have complained about it. Under such circumstances, Wish has become the abandoned child of many sellers, and a large number of sellers have chosen to flee one after another.

But recently, the topic of Wish has once again become a hot topic among sellers. It is reported that in the second quarter report released by Wish, its revenue and net profit both plummeted, and its users lost a lot, which also made the topic of Wish more discussed again. At the same time, Wish, which has been performing poorly for many years, has also begun to try to save itself through brand reshaping and transformation, but whether it can succeed is still a false proposition.

With a net loss of $90 million, Wish tries to save itself

Wish's second quarter financial report showed that its quarterly revenue was $134 million , down 79.57% from the same period last year; its net loss was $90 million , a 19% reduction from the same period last year. In terms of segmentation, the logistics segment contributed the most revenue, at $69 million, followed by the core platform market with $54 million, and finally Product Boost with $11 million.

In fact, it is not just the plummeting revenue and net profit, the platform is also facing the problem of continuous loss of users in the main market. According to a data from foreign media, the number of users on the Wish platform was only 23 million in the second quarter of 2022 , compared with 101 million in the first quarter of 2021, which is equivalent to the loss of more than 70 million users.

Those sellers who started to deploy Wish in the early days also gave up their business on this platform. Xiao Li, a senior seller on Wish, started to deploy on the platform in 2014 and achieved some success. In 2018, his annual sales exceeded 3 million US dollars. However , since 2019, his sales have been declining, and the current monthly sales have fallen to more than 20,000 US dollars.

There are many Wish sellers who have also suffered a setback . They have dropped from hundreds of orders per day to just a few orders today. Faced with the platform that keeps falling behind, some sellers choose to keep their stores open and ship orders as soon as they come in; others simply cut off this platform and put more energy into other platforms.

From reaping the first wave of cross-border e-commerce dividends and becoming one of the four major mainstream platforms, to its current continuous lagging behind, Wish’s transformation can be said to be imminent.

Some time ago, Wish announced that it would continue to focus on strategic transformation, and now it has entered the first stage of brand reshaping. Its logo has been changed from blue background with white characters to green background with black characters . The platform also stated that it would focus on exploring women's fashion categories. In order to improve the user experience, it also updated its homepage, which is more fashionable than before.

At the same time, the platform also increases its exposure by increasing advertising in core countries such as North America and Europe, sponsoring football team season activities, and other measures to increase platform sales.

In addition, Wish has also implemented a series of measures for merchants: launching Wish Standard to classify sellers and suspend transactions with low-level merchants that do not meet the requirements; canceling most fines for violations; canceling "dynamic price increases" globally ; inviting high-quality merchants to join through channels such as potential merchant application questionnaire evaluation results, third-party ecological service provider partners and targeted invitations; launching the Wish Clips short video function to increase sellers' exposure on the platform, etc.

Not only that, Wish also announced changes to its board of directors and strengthened its management team, while converting all high-voting Class B shares into Wish Class A common shares. While simplifying the company's equity structure, it also achieved equal voting rights for all Wish shareholders.

Can Wish's transformation succeed? Most sellers are not optimistic

For sellers, canceling most fines for violations and dynamic price increases is a gesture of goodwill from Wish . Previously, some sellers revealed that the platform unilaterally raised prices for goods, charged sellers a 15% commission after a successful transaction , and kept part of the increased amount for itself , causing dissatisfaction among sellers .

The classification management and targeted invitation of merchants to join also mean, to a certain extent, that Wish is abandoning the previous low-price, low-quality, and imitation strategies of sellers , and is moving towards a refined and high-quality direction. This also sends a signal that the platform is rectifying inactive and illegal stores and providing a relatively friendly ecological environment for sellers.

Although Wish is trying to transform and break through, and its official also said that this reflection strategy has been implemented for a year and a half, according to the editor's interviews with most sellers, its effects are minimal and the results achieved are not ideal.

First of all, since it began its self-rescue last year, Wish has announced a series of transformation plans. The platform mentioned improvements in consumer experience, delivery time, and customer service. In the second quarter, users' net recommendation value continued to increase, product refund rates decreased, etc. However, the reduction in data was very small compared to before, and some merchants also said that they did not feel much effect.

Secondly, the low-price strategy is Wish's ingrained gene, which cannot be changed overnight . Initially, Wish was invincible among low-income groups with its low prices, and quickly occupied a high market share. However, it started with low prices and was also limited by low prices. Low prices prevented some merchants from providing better product quality. In addition, the platform itself had problems such as poor product quality control, which also branded the platform as inferior and fake. It will take time for Wish to get rid of this hat.

The extremely low entry threshold makes the platform a mixed bag of sellers, and some even make a fortune on the platform through fraud. If you want to completely eradicate it, simply removing some sellers is not enough.

An organization's survey of sellers found that only a very small number of sellers still have expectations for the platform, saying that the platform may have potential after self-rescue. However, most sellers also said that the platform has lost the support of buyers and it will be extremely difficult to revive.

Some sellers who have worked on Wish said that the platform needs to focus on brand building and think about how to create a space suitable for brand development for merchants. Today, the United States, its home market, has multiple phenomena such as weak economic growth, polarization between the rich and the poor, and widening income disparity. Consumption stratification is an inevitable phenomenon, but this stratification also brings new business opportunities.

In the post-epidemic era, the business opportunities in the sinking market are still attractive. However, in the United States, where the retail ecosystem is mature, there are comprehensive merchants such as Amazon and Walmart in front, and emerging platforms and independent websites behind. If Wish cannot successfully save itself and return to the front of the track, it is inevitable that it will be cannibalized.

Wish

Blood loss

Self-help