Temu vs. Wish Compared: Wish Usage Down 86% Compared to 2021 While Temu is Taking Over

Wish, an e-commerce app that once aspired to become the next Walmart, has suffered major setbacks in the past two years.

Despite a 31.5% increase in revenue in 2020, the app’s financial performance took a nosedive in 2021 and continued to plummet in 2022, according to a recent report by Business of Apps.

For perspective, Wish reported $1.9 billion in revenue for the full year 2019 but ended 2022 reporting $571 million in full year revenue, lower than its revenue in 2016.

This was reflected in the number of monthly active buyers on Wish’s platform last year, which dropped by a staggering 74% compared to 2020.

Wish’s Q1 2023 financial report claimed that the app was making progress, but the figures presented do not support the assertion.

The report showed that Wish recorded revenue of $98 million, which marks a 49% drop from the previous year and an 87% decrease compared to two years ago. Monthly active buyers have also suffered a severe decline, plummeting from 101 million to just 14 million.

Let’s dive deeper into the analysis of Temu vs Wish, and discover what’s going on with the 2 retail giants.

Temu vs. Wish: Key Differences in Brief

• Origin and Ownership: Wish, established in 2010, operates independently, focusing on low-cost products from international sellers. Temu, launched in 2022, is backed by PDD Holdings, a major Chinese e-commerce conglomerate.
• Business Model: Wish relies on a dropshipping model, offering a wide range of inexpensive items but has faced challenges with product quality and delivery reliability. Temu benefits from PDD Holdings’ robust supply chain and logistics, aiming for more reliable shipping and product quality.
• Market Strategy: Initially, Wish attracted customers through aggressive social media advertising and a focus on extremely low-priced items, leading to quality and satisfaction issues. Temu enters the market with a focus on competitive pricing while also emphasizing product quality and customer service.
• Financial Performance: Wish has seen significant financial downturns, with declining revenues and a decreasing number of active users due to competition and reputational damage. Temu, though newer and with less publicly available financial data, is supported by PDD Holdings’ resources, suggesting a potential for growth and stability.
• Challenges: Wish is working to rebuild customer trust and improve its business model amidst financial struggles. Temu faces the challenge of establishing its brand in a crowded market while navigating the geopolitical tensions affecting Chinese companies in international markets.

Did Temu Become Wish?

No, Temu did not become Wish. They are distinct entities with different origins and operational models. Temu is a recent market entrant backed by PDD Holdings, aiming to capture a share of the online retail space with strategies that focus on affordability, quality, and customer service.

On the other hand, Wish, an older player, has struggled with financial and reputational challenges due to issues related to product quality and customer satisfaction.

While both platforms cater to cost-conscious consumers by offering a wide range of products at low prices, their approaches and trajectories in the e-commerce landscape differ significantly.

Wish Struggles From Reputational Damage

While Wish tried to differentiate itself from competitors such as Amazon and eBay by offering absurdly low prices, it now seems to have backed down from that position.

Wish’s shift away from such deals may be an attempt to rebuild the trust of consumers who have grown weary of the app’s offers.

According to a report by The New York Times, Wish has been plagued by complaints of fake stores, unreliable shipping, and poor customer service.

The company has responded by implementing stricter guidelines for the merchants on its platform and removing those who regularly fail to deliver items.

Furthermore, Wish has cut back heavily on ad spending, which was the main way it brought in customers.

In fact, Wish was the top advertiser on Facebook and Instagram in 2021, where the e-commerce retailer spent $1 billion on sales and marketing in that year.

Chinese Cheap Goods Apps Dominate US Retail Market

Meanwhile, Chinese cheap goods have taken the online retail market by storm, dominating app download charts in the first quarter of the year.

Specifically, Temu, which runs a marketplace for virtually everything from home goods to apparel to electronics, continues to gain popularity among shoppers looking for deals.

The app’s approach is not dissimilar to that of Wish’s early days, offering products at incredibly discounted prices to entice customers to make purchases.

Likewise, Shein, a fast-fashion retailer that has been expanding its inventory and is increasingly competing with Amazon, has captured consumer attention in the fast fashion and cheap goods space.

The surge in popularity of Temu and Shein comes as consumers are increasingly turning to apps that offer deals and savings in the wake of an uncertain economic landscape marked by high-interest rates, macroeconomic headwinds, and rising inflation.

Temu Vs Wish: Full Comparison

Comparing Temu and Wish provides an insightful look into the evolving landscape of the e-commerce industry. Both platforms aim to provide affordable products to a global audience, but their strategies and market positions differ significantly.

Business Model and Market Position

1. Wish: Launched in 2010, Wish focused on providing an array of inexpensive items from merchants primarily based in China. It gained popularity through its unique algorithm that personalized the shopping experience, showing users products they might like. Wish’s model was heavily reliant on dropshipping, where sellers ship products directly to consumers, reducing inventory costs.
2. Temu: A newer entrant, Temu, part of the Chinese conglomerate PDD Holdings (formerly Pinduoduo), launched in 2022. Temu’s model is similar to Wish in offering affordable products, but it benefits from the strong logistics and supply chain networks established by PDD Holdings in China, potentially offering more reliable shipping and product quality.

Market Strategy and Customer Base

1. Wish: Initially, Wish’s strategy involved aggressive marketing and heavy reliance on social media ads to attract customers. However, its focus on extremely low-cost items led to issues with product quality and customer satisfaction, impacting its reputation and customer base in the long term.
2. Temu: Temu enters the market learning from the experiences of predecessors like Wish. It focuses on competitive pricing but also seems to emphasize quality and customer service more. Temu’s strategy also involves leveraging PDD Holdings’ technological and logistical expertise to enhance the shopping experience.

Financial Performance and Growth

1. Wish: After a promising start with rapid growth and a successful IPO in 2020, Wish faced significant financial challenges. Its revenue and user base have declined due to increased competition, customer dissatisfaction, and changes in its marketing strategy.
2. Temu: Being relatively new in the market, Temu is in its growth phase. The financial performance of Temu is not as publicly documented as Wish’s, but its association with PDD Holdings suggests a strong financial backing and a potentially more sustainable growth trajectory.

Challenges and Future Outlook

1. Wish: The major challenges for Wish include rebuilding customer trust, improving product quality, and finding a sustainable business model amidst declining sales and a tarnished reputation.
2. Temu: For Temu, the challenges lie in establishing its brand in a market crowded with established players like Amazon and eBay, as well as navigating geopolitical tensions that affect Chinese companies operating in international markets.

Conclusion

Now you know more about the endless battle between Temu vs Wish.

While Wish and Temu share similarities in targeting cost-conscious consumers with a variety of products, their approaches, challenges, and market positions are distinctly different.

The e-commerce landscape continues to evolve rapidly, influenced by economic factors and consumer preferences.

While Wish struggles to regain its footing amidst financial and reputational challenges, new players like Temu and Shein are capitalizing on the market’s demand for affordable goods, reshaping the competitive dynamics in the process.

Final Thoughts

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