How Wish Built (and Toppled) an Internet Bargain Shop

There were unbelievable bargains at the “bestdeeal9” store, hosted on e-commerce platform Wish, including a $2,700 smart TV selling for $1 and an advertised gaming computer. for US$ 1.30 (R$ 6.9). But none of the offers were real and Wish knew that.

The company, an online news emporium that had more than $2 billion in sales last year at unbelievable discounts, created “bestdeeal9” as an experiment. Offers that were removed for violating Wish’s policies were reposted on “bestdeeal9” and used in part to track whether shoppers complained when their orders didn’t arrive.

Employees working on the project repeatedly pressured executives to close shop, arguing it was illegal and unethical, according to three officials familiar with the project who spoke on the condition of anonymity. More than 213,000 people shopped at the store, according to an internal document seen by The New York Times, although the document does not say how many received their products.

Tarek Fahmy, then senior vice president of engineering and responsible for the project, closed it in 2020 after operating for several months, officials said. Fahmy, who has since left Wish, did not respond to requests for comment. Wish declined to comment on “bestdeeal9”.

Several employees said “bestdeeal9” is indicative of the kind of practice — prioritizing short-term growth over customer service — that initially turned Wish into an advertising and retail giant, but now has it desperately trying. correct yourself.

Company attracts ‘invisible half’ of Americans

Since its founding in 2010, Wish has had many of the hallmarks of a classic Silicon Valley success story: Started by a young programmer and his college friend, it reportedly turned down a takeover offer for $10 billion. billion) from Amazon and was described by Recode as an app “that could be the next Walmart”.

It has developed a reputation as an internet bargain shop, offering trinkets and oddities directly from suppliers in China. She bombarded shoppers with viral online ads for $1 plastic tongue clips, $3 “leather face diapers” for cats, and a handful of worms for $2. 10.6).

For a while, the company was the biggest advertiser on Facebook and Instagram and one of the biggest on Google, spending more than $1 billion on sales and marketing last year. The Los Angeles Lakers won the 2020 NBA championship with the blue Wish logo on their jerseys thanks to a multi-year marketing partnership.

The company had 1,218 employees at the end of 2021; half of its six offices were in China. At the San Francisco headquarters, there were buffet lunches, a bar for happy hours and parties, and a coffee shop with floor-to-ceiling views of downtown and the Golden Gate Bridge.

Peter Szulczewski, the company’s former CEO, once compared Wish’s success to Donald Trump’s 2016 election victory, explaining that both the company and the candidate attracted “the invisible half” of Americans who were commonly ignored by political analysts and Silicon Valley elites.
But Wish squandered its initial promise, according to interviews with nine former employees.

Misleading experiments like “bestdeeal9” drove customers away, as did the low standard of products and unreliable deliveries. When the rising cost of ads forced it to cut back on marketing, the company struggled to attract new buyers.

Wish is now struggling to turn around. The company declined to release its crop of newly hired executives for interviews, but said in a statement that “in the past six months, Wish has undergone a major transformation.”

“We’ve already seen significant traction, and we remain committed to executing on our priorities and building a platform for long-term growth,” the company said.

But making growth a top priority proved to be crippling in the long run for Wish. Even with tighter quality controls on products, merchants and delivery, revenue in the last fiscal quarter was down 76% from a year earlier, the company said May 5. There were 27 million monthly users at the end of the first quarter, compared to 101 million a year earlier. The company went public in 2020 at US$ 24 (R$ 127.3) per share, which today is traded at less than US$ 2.

“Companies must evolve and mature,” said Christian Limon, who was Wish’s head of growth and interim marketing director in 2016 and 2017. “The easiest way to say what happened is that what worked for her stopped working. and did not evolve.”

France barred retailer for selling ‘dangerous appliances’

The company’s founders, Szulczewski and Danny Zhang, were mathematics students at the University of Waterloo and recruited their first ten employees from the Canadian school’s mathematics department. In an interview with his former school, Szulczewski described Wish as “very much embedded in a culture of logic”. He and Zhang did not respond to requests for comment for this story.

After graduating, Szulczewski became a software engineer at Google and was inspired by the tech giant’s powerful automated ad business while starting his own company, Limon said.

But many of these ads were presented to people who had no interest in prosthetic feet or roast turkey hats. It was as if Wish was “throwing spaghetti at the wall to see if it would stick,” said Jennifer M. Grygiel, an associate professor of communication at Syracuse University.

Consumers complained to the Office of Best Companies about Wish products that never arrived or were unrecognizable when they arrived. France, which was one of Wish’s biggest markets, ordered search engines and mobile app stores to remove the company from its online listings, citing the presence of dangerous gadgets and other products. Wish merchants faced lawsuits from companies such as Peanuts Worldwide, which owns characters from the popular comic book, alleging trademark infringement and forgery.

Still, Wish, which is run by a parent company called ContextLogic, did well at the start of the pandemic as stay-at-home orders eliminated competition from brick-and-mortar stores. But in the past year, as shoppers have started to hang out more and become less engaged with Wish, digital advertising has also become more expensive, prompting the company to reduce its spending. (She said she planned to pick up the pace this summer.)

Four employees said Wish’s long lead times have increased further during the pandemic, amid supply chain disruptions. Without informing customers, the company began extending delivery times for orders that were late to avoid having to pay refunds, officials said. An internal document cited the example of a customer who waited more than three months for a lost package before his refund request was granted.

Wish recently announced more accountability measures for merchants. Existing sellers will be measured on metrics such as customer reviews, with perks such as increased exposure for top performers. New merchants (which the company said now include more sellers outside of China) must qualify to participate.

Last winter, Wish hired Vijay Talwar, a former executive at Foot Locker and Nike, to take over as CEO after Szulczewski left the firm. Officials said Szulczewski, already a distant figure in the office, appeared to have all but disappeared after the initial public offering.

Several employees said they worked up to 18 hours a day during the pandemic, while Szulczewski, whose $15.3 million Bel Air mansion overlooks an estate owned by media mogul Rupert Murdoch, posted shirtless selfies and photos of him with figures like DJ Steve Aoki. Wish and Szulczewski did not comment.

But many see reason to be hopeful: Talwar came into the office every morning at the start of his tenure to walk the halls and talk to people. This year, to alleviate burnout among employees, Wish began offering a day off each month as a “global refresh day.” The company has also responded to negative comments on Glassdoor, an online forum for anonymous employer reviews, with promises to improve.

“We are experiencing major new growth,” Wish wrote in a review, “and many changes.”

Translated by Luiz Roberto M. Gonçalves