Wish is one of the niche e-commerce platforms that are not as popular as Amazon or eBay. Moreover, Wish loses money each quarter when every e-commerce platform posts profits.
In this article, we explain indepthly how Wish makes money. Here we point out an unknown unethical revenue source that many in the industry ignore.
How Does Wish.com Make Money?
There are three primary revenue sources of Wish.com — selling users’ data, commissions from each successful sale, and advertisement fees from manufacturers.
Even though Google has many products such as a search engine, YouTube, Waymo, Android, Chrome, etc., at the core, Google is an advertising company. Google’s primary revenue source is the ads business, and its main product is user data. Google knows more about the user than any other company in the world. They employ more than 70 tracking methods to track online users.
The founder of Wish.com knew this business model because they worked at Google. Therefore, they created ContextLogic (Wish.com). Using Wish, they sell cheap products. But the platform isn’t their primary revenue source. Users’ data is.
According to Bloomberg, “ContextLogic Inc., doing business as Wish, provides online services that include media sharing and communication tools, personalized and other content, and e-commerce.“
Therefore, many don’t realize that ContextLogic is using the Wish.com platform to harvest users’ data. Later they sell that data to various companies to make a profit. The items on the Wish.com platform aren’t their primary products; the users who purchase items from them are the real products of Wish.com.
In 2021, Wish.com earned more than $743 million by selling users’ data alone.
Wish provides a technological platform for manufacturers to sell their products directly to potential buyers. This way, manufacturers don’t have to rely on third-party wholesalers.
Wish has modeled its businesses similarly to Uber. Uber is a technology company that connects ride-share drivers to riders. Uber doesn’t own or operate any vehicle. The drivers work as independent contractors. The drivers use the Uber app to get potential customers. In return, Uber gets a commission from drivers.
Similarly, Wish helps manufacturers market their products on its platform. Wish takes a commission from each successful sale. Typically the commission rate is 15%. However, the commission varies depending on sale volume, product category, and sellers’ business size.
Wish also allows the manufacturer to advertise their product on the platform. As a result, sellers get more sales, and Wish.com earns an advertisement fee.
On the Amazon platform, Amazon and third-party sellers sell products. However, Unlike Amazon, Wish doesn’t sell any products on its platform. Only manufacturers sell products on Wish. Thus, Wish doesn’t bring in revenue as Amazon does.
Is wish.com a Chinese Company?
There’s a misconception among many people that Wish is a Chinese company. However, it’s not accurate. ContextLogic is the parent company of Wish, an American company registered in Delaware and headquartered in California. However, most products that are sold on Wish are made in China.
Many people get mental satisfaction by seeing that Wish.com is a California-based company. However, don’t let your guard down. Even though Wish is based in the USA, they regularly involve themselves in many unethical business practices.
There are two founders of ContextLogic. They are Piotr Szulczewski and Sheng Zhang. Piotr Szulczewski is a Polish-born Canadian citizen, and Sheng Zhang is a Chinese citizen.
Wish has two business offices. One is in California another one is in China. Sheng Zhang operates the Chinese office with hundreds of Chinese employees. These Chinese employees have full access to Wish customers’ information, which is scary.
How is Wish.com Legal?
Wish is infested with fake products. Wish does a poor job tackling fake product sellers on their platform. As most of the sellers are from China, Wish has no direct control over anything. Moreover, if a seller gets shut down due to fake products, they can open another seller account. Therefore, controlling sellers who sell counterfeit products on Wish is tough.
Wish also sells products that may be illegal in many jurisdictions. For example, it may sell stun guns in an area where by law, it’s illegal. However, Wish.com says that it’s not their problem that sellers are selling illegal items because it’s not them who is selling the item. Wish is only a marketplace.
Wish.com compares itself with the Facebook marketplace, where one person can sell an item to another person. If someone sells an illegal thing, it’s the person’s fault who is selling the item.
When asked why — Wish — allows fake products to be listed on its platform, Wish replied, “under no legal obligation, we have to carry out checks on the 150 million products offered for sale on our platform because it’s a marketplace.”
Wish.com argues that, as they are simply providing a place to sell products, it’s not their responsibility to check whether a product is fake or not. They have no legal obligation.
In November 2021, The French government forced Google and Apple to remove Wish App from its French app store. Moreover, they also forced Google, Bing, Yahoo, and other major search engines to delist Wish.com from search results because the French government found that most products sold on Wish are fake, illegal, unsafe, and dangerous.
Moreover, the french authority also found that most electronics and perfumes that sell on Wish don’t follow EU regulations and contain hazardous and harmful chemicals.
Except for France, no other government authority has investigated Wish. Therefore, it’s still operating in many countries.
How is Wish.com still in Business?
The products that are sold on Wish.com are very cheap. Moreover, there are many products that are made by questionable companies. Still, over the last decade, ContextLogic, the parent company of Wish.com, has remained in Business.
Wish.com is still in Business because millions of people in the world seek to buy products that cost less. One of the founders of Wish.com is Chinese. In China, there’s a platform named TaoBao owned by Alibaba.
Taobao sells cheap products to billions of people. Many don’t realize there’s a large market where people actively seek to purchase cheap products. Wish.com follows this business model where they target people who actively look for affordable products.
According to Wish.com, most of their customers come from states where the poverty rate is higher. They also acknowledge that they have very few customers from New York or California, where the poverty rate is lower.
Therefore, Wish.com targets this niche customer base with frugal spending habits. It’s why they are still in Business.
Is Wish.com a Publicly Traded Company?
Wish is a publicly-traded company on the US stock exchange. Its stock symbol is WISH. From 2010 to December 2020, it was a private company.
Is Wish.com Profitable?
Wish became a public company in 2020. Since then, they haven’t posted a single profitable quarter. In the first quarter of 2022, Wish lost more than $60 million. According to the 2021 financials, Wish lost more than $361 million in 2021. Here are the financials.
However, a few years ago, the founder of ContextLogic said that Wish.com was already profitable. However, they are not posting profits because they are spending more money on advertising than needed because they are currently focusing on product growth.
Does Wish.com Have a Stock Symbol?
ContextLogic is the parent company of Wish. It’s a publicly-traded company on the US NASDAQ exchange with the stock symbol “WISH.”
WISH first started trading in the stock market in December 2020. On the day of opening, it was trading at $30. However, over the last few years, WISH has lost 90% of its market value, and now it’s trading at less than $2 per share. It shows that Wallstreet and retail investors aren’t impressed by ContextLogic’s financials.
