How Wish Built (and Fumbled) a Dollar Store for the Internet – The New York Times - eComEmpireStore + Brought to You By: Robert Villapane Ramos

How Wish Built (and Fumbled) a Dollar Store for the Internet – The New York Times

The number of users has plummeted, and its stock price has dropped. Former employees point to an emphasis on short-term growth over customer service.Credit…Ariel DavisSupported bySend any friend a storyAs a subscriber, you have 10 gift articles to give each month. Anyone can read what you share.By Tiffany Hsu and Sapna MaheshwariThere were unbelievable bargains […]

The number of users has plummeted, and its stock price has dropped. Former employees point to an emphasis on short-term growth over customer service.
Credit…Ariel Davis
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Tiffany Hsu and
There were unbelievable bargains on “bestdeeal9,” a store hosted on the e-commerce platform Wish, including a $2,700 smart TV being sold for $1 and a gaming computer advertised for $1.30.
But none of the offers were real, and Wish knew it.
The company, an online novelty emporium that had more than $2 billion in sales last year by dangling hard-to-believe discounts, created “bestdeeal9” as an experiment. Listings that had been removed for violating Wish policies were reposted on “bestdeeal9” and used in part to track whether shoppers complained when their orders never arrived.
Employees working on the project repeatedly pushed executives to take down the store, arguing that it was both illegal and unethical, according to three employees familiar with the project who spoke on the condition of anonymity to discuss company matters. More than 213,000 people made purchases from the store, according to an internal document reviewed by The New York Times, though the document did not say how many received their items.
Tarek Fahmy, then the senior vice president of engineering in charge of the project, ended it in 2020 after it operated for several months, the employees said. Mr. 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 practices — giving priority to short-term growth over customer service — that initially turned Wish into an advertising and retail behemoth but have now left it desperately trying to right itself.
Since its founding in 2010, Wish had many of the hallmarks of a classic Silicon Valley success story: started by a young coder and his college friend, rumored to have turned down a $10 billion acquisition offer from Amazon and described by Recode as an app “that could be the next Walmart.” It developed a reputation as the dollar store of the internet, shipping odd gimcracks and thingamajigs directly from vendors in China. It blitzed shoppers with viral online ads for $1 plastic tongue clamps, $3 “leather face diapers” for cats and a $2 handful of worms.
For a while, the company was the top advertiser on Facebook and Instagram and among the biggest on Google, spending more than $1 billion on sales and marketing last year. The Los Angeles Lakers won the N.B.A. championship in 2020 with the blue Wish logo on their jerseys, thanks to a multiyear marketing partnership.
The company had 1,218 employees at the end of 2021; half of its six offices were in China. At the headquarters in San Francisco, there were catered lunches, a bar for happy hours and parties, and a cafeteria with floor-to-ceiling views of downtown and the Golden Gate Bridge.
Peter Szulczewski, the company’s former chief executive, once compared Wish’s success to Donald J. Trump’s 2016 election victory, explaining that both the company and the candidate had appealed to “the invisible half” of Americans who were routinely overlooked by political pundits and Silicon Valley elites.
But Wish squandered its early promise, according to interviews with nine former employees. Deceptive experiments like “bestdeeal9” drove customers away, as did low product standards and unreliable shipping. When the rising cost of ads forced it to scale back its marketing, the company struggled to attract new shoppers.
Wish is now scrambling to turn itself around. The company declined to make its newly hired crop of executives available but said in a statement that “over the past six months, Wish has undergone a massive transformation.”
“We have already seen significant traction and remain committed to executing against our priorities and building a long-term platform for growth,” the company said.
But for Wish, making growth the priority over all else proved to be crippling in the long run. Even with stricter quality controls on products, merchants and delivery, revenue in Wish’s most recent fiscal quarter plunged 76 percent from a year earlier, it reported on May 5. There were 27 million monthly users at the end of the first quarter, compared with 101 million a year earlier. The company went public in 2020 at $24 a share and now trades at less than $2.
“Companies are supposed to evolve and mature,” said Christian Limon, who was Wish’s head of growth and acting chief marketing officer in 2016 and 2017. “The easiest way to say what happened is that what worked for it stopped working and it never evolved.”
For years, what worked was advertising. Until recently, Wish said its marketing machinery operated at a “gargantuan scale,” claiming in a job posting this spring that it sends billions of emails, push notifications and texts each day.
The company also maintained a sprawling mansion in Bel Air where influencers were invited to produce content against Wish-branded backdrops and to attend events such as “Pink Prom.” During the pandemic, the police were called twice to a raucous, largely mask-free Halloween party at the property, which Wish rented until late 2021. (It is now available to lease for $300,000 a month.)
But first and foremost, Wish was “a crazy superpower in digital ads,” Mr. Limon said, using algorithms to serve ads to shoppers through Facebook and Google.
The company’s founders, Mr. Szulczewski and Danny Zhang, had been math students at the University of Waterloo and recruited their first 10 employees from the Canadian school’s math department. In an interview with his alma mater, Mr. Szulczewski described Wish as “very embedded in a culture of logic.” He and Mr. Zhang did not respond to requests for comment for this article.
After graduating, Mr. Szulczewski became a software engineer at Google and took inspiration from the tech giant’s powerful automated ads business while building his own company, Mr. Limon said.
But many of those ads were delivered to people who had no interest in prosthetic feet or hats shaped like roasted turkeys. It was as if Wish were “throwing spaghetti on the wall and seeing what sticks,” said Jennifer M. Grygiel, an associate communications professor at Syracuse University.
Consumers have complained to the Better Business Bureau about Wish products that never arrived or were unrecognizable when they did. France, which was one of Wish’s largest markets, ordered search engines and mobile app stores last fall to remove the company from their online listings, citing the presence of dangerous appliances and other products. Merchants on Wish faced lawsuits from companies like Peanuts Worldwide, which owns characters from the popular comic strip, claiming trademark infringement and counterfeiting.
Female shoppers complained about being shown ads for products designed for male genitalia. Ads that showed an animated penis appeared on apps that could appeal to children, including a game called Crazy Cake Swap. Those ads drew scrutiny from British advertising regulators, as did ads promising unsubstantiated discounts of up to 98 percent for sneakers, as well as ads featuring a baby’s exposed bottom and a woman in a corset with her breasts partly revealed.
“It’s a strategy that’s more similar to spam than actually trying to hit a target market,” Mx. Grygiel said. (Wish said it was tightening its advertising controls, promoting products only from top-rated merchants and filtering out inappropriate ads.)
Still, Wish, which is run by a parent company called ContextLogic, did well early in the pandemic, as stay-at-home mandates stifled competition from physical retailers. But last year, as shoppers were venturing out more and becoming less engaged on Wish, digital advertising was also becoming more expensive, causing the company to scale back its spending. (It said it planned to pick up the pace this summer.)
Pressure also built internally at Wish for years.
Managers were constantly shifted around — like chess pieces, one employee said — which resulted in high turnover among workers fed up with the upheaval. Many employees complained that the company was not equipped to handle the orders that poured in early in the pandemic, and colleagues burned out under the intense stress and long hours.
Employees said their peers were often ignored or made to wait after raising concerns about quality control issues, such as the lack of standardized product sizing for merchants. Listings for weapons and other illegal products were often not removed, they said. Neither were many misleading listings, like one that appeared to offer a refrigerator for $1 but was actually selling the magnets shown in the photo of the appliance.
Four employees said Wish ran an experiment involving raffle-style flash deals that required customers to pay small amounts to bid on items. For losing bids, the employees said, the company gave out only some refunds, and then only to the customers who requested them. Customers who stayed silent were not refunded for months — a delay that set off several internal complaints.
Four employees said Wish’s long delivery times grew even lengthier during the pandemic, amid supply chain disruptions. Without informing customers, the company began to extend its delivery deadline on orders that were running late to avoid having to pay out refunds, the employees said. One internal document cited an example of a customer who waited for a missing order for more than three months before a request for a refund would be honored.
Wish has recently announced more accountability measures for merchants. Existing sellers will be evaluated on metrics like customer reviews, with perks like greater exposure for top performers. New merchants (which the company said now include more sellers from outside China) must qualify to join.
This past winter, Wish hired Vijay Talwar, a former executive at Foot Locker and Nike, to take over as chief executive after Mr. Szulczewski stepped down. Employees said Mr. Szulczewski, already an aloof figure in the office, seemed to have all but disappeared after the initial public offering.
Several employees said they worked up to 18-hour days during the pandemic while Mr. Szulczewski, whose $15.3 million mansion in Bel Air overlooks an estate owned by the media mogul Rupert Murdoch, posted topless selfies and photos of himself hanging out with figures like the D.J. Steve Aoki. Wish and Mr. Szulczewski did not comment.
The company said last month that it had “started a fresh organizational chapter.” Mr. Talwar’s fellow executives, who joined recently from companies like Google and Shutterfly, have overseen an app redesign and have plans that include a new women’s fashion category. Wish has said customer service response times are also faster.
Some of the changes have been painful. On March 1, employees received a message announcing several hundred layoffs. A few employees called it “Black Tuesday.”
But many see reason to hope: Mr. Talwar came into the office every morning early in his tenure to walk the halls and chat with people. This year, to alleviate burnout among employees, Wish began offering one day each month off as a “global refresh day.” The company has also been responding to negative comments on Glassdoor, an online forum for anonymous reviews of employers, with promises to do better.
“We are going through a lot of new growth,” the company wrote under one review, “and a great deal of change.”