Wish is an online e-commerce platform based in California, USA, that primarily sells cheap products made in China. Even though Wish has similarities with Amazon and eBay, there are also many differences. Most Chinese companies copy American businesses; however, Wish has copied a Chinese online e-commerce platform — TaoBao.
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.
Wish copied their business model from Uber. Uber doesn’t own or operate any car. They only provide a technology connecting individual drivers (known as contractors) to riders. Uber only provides the platform and handles the payment.
Similarly, Wish is primarily focused on the Wish App and its platform. It doesn’t sell or ship any products. They also don’t process returns. Wish only connects the buyers with sellers and manufacturers and handles the payments. In return, Wish gets a commission from the sellers.
ContextLogic is the parent company of Wish.com. 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. They both met during their study at Waterloo University in Canada. The founders of ContextLogic are specialists in tracking people’s behavior online.
After finishing study, Piotr Szulczewski joined Google in California.
Even though Google is known for its search engine, YouTube, Gmail, Waymo, Android, Chrome, and other products, Google is an advertising company in reality. Google’s primary revenue source is the ads business, and its main product is user data. It knows more about the user than any other company in the world. Google employs more than 70 tracking methods to track online users.
The founder of Wish.com knew this business model. 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.
Even though Wish’s headquarter is in California, they also have a Chinese office with hundreds of Chinese employees; therefore, if you are from Europe and America, be careful with your bank account or debit card number.
Wish is primarily known for selling cheap and inexpensive products. Wish products are cheap for the following reasons.
Product Comes From Manufacturers to Consumers
Wish follows the business model of TaoBao. Taobao is a Chinese website that allows consumers to buy cheap products directly from factories at retail prices. However, TaoBao mainly serves the Chinese population and doesn’t have an international presence. Wish.com fills the gap here.
Most sellers on Wish.com are from China, and most products come directly from the manufacturer. As there is no intermediary, the sellers don’t have to increase the product’s sale price. Thus, most items on Wish are cheap.
In a typical business, business owners go to a manufacturer in China, Vietnam, India, or Bangladesh and order items on a wholesale level. Then they import those items to the US and store them in a warehouse.
From the warehouse, they ship the item to customers or ship those items to the regional warehouse.
All these steps — shipping, labor, and warehouse — cost a lot of money. Therefore, any item these businesses sell will be pricey.
However, most products on Wish.com directly ship from the manufacturer, and they can provide a more lucrative price than those doing business in the US or Europe. It’s why most products on Wish are inexpensive.
Wish has exclusively opened an office in China to help Chinese manufacturers and sellers. They are working with those manufacturers to help them sell products on Wish to US buyers.
Cheap Shipping Cost
In the online retail business, shipping cost is the main choking point. Amazon is very popular in the world because not only do they sell products at a reasonable price, but they also provide free shipping. However, Target, Walmart, Macy’s, JCPenney, and others tried to tackle Amazon but couldn’t do it for many reasons, and the shipping cost was one of them.
Over the years, Amazon has developed its shipping network to lower its reliance on UPS, FedEx, and USPS. It’s why other online retail businesses can’t compete with Amazon.
One of the critical reasons for Chinese manufacturers’ success is that the shipping cost from China to the US is very low. On items weighing less than 4.4lbs cost less to ship to the US from China than US-US domestic shipping. Yes, it’s accurate.
There’s an agreement between the USPS (United States Postal Service) and China Post that allows Chinese companies and people to send products that weigh less than 4.4 lbs at a steep discount. According to data, it’s $1 cheaper to ship something from China to the USA compared to sending something domestically using USPS.
The Chinese government also heavily subsidizes the China Post. Therefore, Chinese manufacturers can send products at cheap shipping costs.
Each year, USPS loses hundreds of millions of dollars due to the agreement that USPS and China Post made. It basically enriches Chinese companies at the expense of US taxpayers.
Most Are Low-Quality Products
The products that sell on Wish.com have very low quality. Even if something is priced higher, the quality of the product will be terrible.
Most of the product photos and descriptions on the Wish platform are misleading. Chinese manufacturers falsify photos to advertise their products. Moreover, most of the time, the item shown online has no resemblance with the actual product sold. Product misrepresentation is rampant on Wish.com.
Whatever the price of the product, it always has poor quality. These products will not last long compared to those you can buy in the US.
Manufacturing in the US and China is entirely different. Take, for example, a company that wants to produce a rubber duck in a California factory. As this company is situated in California, it must strictly follow all local, state, and federal environmental and labor laws.
In the US, not only are the labor costs high, but raw materials are also expensive due to strict rules and regulations. For example, no company can use a chemical substance that can cause cancer. Thus, making the rubber duck in the US is costly.
However, China manufacturing has no rules. Companies in China will use anything to lower their production cost. There’s no organization in China that looks after the standard of the product. Most of the time, Chinese companies use chemicals that are harmful to humans. Thus, they will be able to make the same rubber duck. But the quality will be poor, and it may contain chemicals that are harmful to humans.
Moreover, China has very little worker protection. In China, the culture of 996 is prevalent where a worker works from 9 AM to 9 PM 6 days a week. Worker exploitation is common in China.
Because of the low-quality raw materials, lack of quality control, and labor exploitation, Chinese manufacturers can produce products inexpensively. Thus, they can sell products at a low price.
Most Products on Wish are Fake
Most products that are on sale on Wish are Fake, that is, cheap knockoffs of international brands.
China is famous for counterfeit products. They fake many successful brands’ products. It includes sneakers, clothes, perfumes, headphones, jewelry, etc. Therefore, if you buy from Wish and if it ships from China, it’s highly likely that the product is fake.
The majority of products that we consume in the US come from China. Most big companies produce their products in Chinese factories, bring those to the US, and sell them here.
In China, there are no rights for a foreign company for its Intellectual Property (IP). Therefore, even if an American company does all its R&D and spends millions of dollars to develop a product, the moment this company goes to China to manufacture the products, they lose all the product blueprints.
The Chinese companies that make the products for the American companies also create more products for themselves with different branding but at a lower quality to save costs. Then they go to Aliexpress, eBay, and Wish to sell the same products at lower prices. This way, the Chinese companies spend $0 on R&D but reap all the benefits by stealing IP from other foreign companies.
China runs on Nationalism. Moreover, the Chinese care more about money than honesty. In the name of Nationalism, stealing IP from other nations and companies is not only accepted but also encouraged. Therefore, when Chinese companies make fake products, the Chinese authorities do nothing to prevent it.
Most Wish platforms’ products are fake, which is why those items are cheaper.
Wish is primarily a marketplace that helps Chinese manufacturers directly sell products to consumers. Unlike other e-commerce websites such as Amazon or eBay, Wish doesn’t sell products. It only provides a platform to sellers and buyers.
Most of the items on Wish are cheap because almost all the items come from China, the product quality is very low, and most of the products are fake.