Founded in 2010 and based in San Francisco, Wish has become known for its ultra-low-priced products sold primarily by Chinese manufacturers. Co-founder Peter Szulczewski bet that shoppers would be willing to accept weeks of delivery time in exchange for bargain prices.
Those who follow Wish will also be familiar with Temu’s marketing gambit that took over Facebook and Instagram well before Sunday’s Super Bowl. The company has invested heavily in Facebook’s platform to attract shoppers and has struck a deal to put its logo on Los Angeles Lakers jerseys.
But the company is running out of cash and said it was considering strategic alternatives after firing Mr. Szulczewski as CEO last November.
Qoo10 will now take on Temu and Shein, both of which originate from China and still have strong ties to the world’s second-largest economy. TikTok, owned by China’s ByteDance, also launched an online marketplace in the United States last year. By offering free shipping and deep discounts, both companies are showing they are willing to spend big to attract shoppers, rather than just taking a loss on cheaper products.
Their advertising spending has greatly boosted Meta’s sales, but hurt retailers like handmade goods retailer Etsy. Last year, Etsy admitted that Tem and Shayne were “taking a little bit of their share from everyone.”
During and immediately after the Super Bowl, Mr. Tem ran several ads for “Store Like a Millionaire,” promoting $15 million in giveaways. For the second year in a row, brands spent about $7 million on his 30 seconds of ad time during games.
Stifel analysts wrote in a note last November that Tem is estimated to have spent between $600 million and $1.4 billion on advertising in the first nine months of 2023. The company estimates that during the same period last year, Temu had an average of 70 million monthly active users.
Temu, which was founded in late 2022, is well-funded thanks to its parent company, PDD Holdings. Founded in 2012, his Shein has started advertising aggressively on social media in recent years.
As the hype dies down, Wish may get a new owner. Morgan Stanley analysts said in a note late last month that while the number of U.S. households shopping on Temu continues to decline, web traffic and app usage data “have continued to decline since October and during the holiday period. However, there are indications that the spread is stagnant or slowing down.
clock: TEM, new users decrease after Super Bowl