Going to shops and buying something is a thing of the past. In the current world, people might have at least one thing online. This is something that is not hard to understand. Why wouldn’t you want to get something just sitting at your home when you can get it? You don’t have to leave your house or spend time searching for things. All you need to do is go on the internet and you can find literally any you want. The best part about all of this is how easy it is to get these things. Especially, at this point in time. The only thing you need is a smartphone and you can almost get anything delivered to your doorstep. One cannot deny that people absolutely love buying things online. E-commerce websites have changed how things were bought and sold forever.
Just look at the number of e-commerce websites that are present in today’s world. There are tons of websites that sell all kinds of products. Not only that but if you see there are more now companies that are interested in selling their products online directly to the customers. Part of the reason why e-commerce websites have been so successful is because of the deals that they provide. Even the companies and businesses like them as they don’t have to rely only on stores to sell their products. Merchants can sell their products online and grow their businesses. The customers on the other hand would get discounts and get their products delivered to their homes. Today’s article is about one such e-commerce website that goes by the name Wish. Wish is just like most of the e-commerce websites that you already know of. This article will explain the business model of Wish.
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What is Wish?
If you are someone from America then you probably know about this e-commerce company. Unlike the giants in the e-commerce business, this company was founded less than a decade ago. This e-commerce mobile application was founded in the year 2010 in San Francisco. It was founded by Danny Zhang and Peter Szulczewski. The app is nothing like how you see it today. When it started out it allowed its users to make lists of things they would like to buy in the future. Using Wish people could just go to the website of the merchant and buy the things they needed directly from them. After some time it started recommending products to the users. It only recommends products that are similar to the ones on your wishlist. Soon the company started growing and as it grew it started partnering with more and more merchants.
By this time the users could buy the products directly from the wish application. Even the application started not only recommending but also promoting the products that are on the wishlists of the users. Users absolutely loved this application. Above all, they would get great discounts on the products. There is almost nothing that you cannot find on Wish. You can find anything from clothing to electronics you name it and Wish has got it all. The company partners with anyone that can sell a product. Most of the companies only partner with manufacturers, retailers, and brand owners but Wish also partners with artists and crafters. This is part of the reason why it is so successful. As of today, Wish is the most downloaded e-commerce application with over 500 million users. It has more than a million merchants and 75 million monthly active users.
Business model of Wish
Wish has generated more than one billion dollars in revenue in the year 2017. Today the company is valued at nearly $9 billion. To achieve this level of success in less than a decade Wish had done many things right that up-and-coming e-commerce websites can learn from. Let’s look at the things they have done to grow their business.
Providing a wide variety of products to choose from
This is something that you will find in all the e-commerce solutions that are at the top. They have almost all kinds of products that you are looking for. It is like walking into a mall that every single item that you can think of. If you want to get more and more users to buy from your application then you have to have products that most people like to buy. Not everyone wants to buy a product from the company that you partnered with. They want to buy products from the merchants or companies that they like. This is something that Wish has understood very early. So, as soon as they started having some success they partnered with anyone and everyone they could. As mentioned earlier Wish has more than a million merchants at this point of time which is more than enough for an e-commerce application.
Personalization
If you look at any e-commerce website you will notice that they won’t be recommending you any products. All they would be doing is showing you ads and the best deals of the day. But Wish has figured out that this strategy is not going to work if they want to make the users buy products on their application. They said that they focused more on impulsive buying. This means that they wanted to make the customers want to buy a product as soon as they see it. However, you cannot sell a product to someone who doesn’t want to buy it. So the only products you can make people buy are the products they want to buy.
That is why Wish cleverly asks you about your gender and also asks you to make the products you want to buy later. By looking at this they would have a clear idea on what you are interested in. So they don’t show you the things that you are not interested in. They will only show you the products that are similar to the items on your wishlist. So when a customer or user gets a recommendation about a product they are most probably going to buy it if the deal is good. That’s how it makes people buy products on its application. Not only that but it generally has discounts on lots of products. So you could open the application on any point in time and find a good deal.
Merchants
Without the merchants, Wish wouldn’t have anything to sell. So they have to make sure that each and every one of their merchants is happy and they have a million of them. Like other leading e-commerce platforms Wish also has a separate application for merchants. Here the merchants can create their account and place their products. What Wish does is that it helps these merchants to reach out to their potential customers. If someone is selling earphones then Wish will recommend their earphones to the people who are interested in buying earphones. This will help the business to reach more and more potential customers. It helps businesses to improve their sales within days after associating with Wish. It also helps when you have 500 million users. Wish also provides discounts that are directly offered by the merchants so that they do not incur any losses.
How does Wish make money?
Wish also uses this multi-app approach to sell products. It has multiple applications each one designed to sell specific types of products. By doing this it will be giving applications that people can choose to have on their mobile phones. For instance, it has Geek which is an application that you would want to have if you are interested in electronics. But all these applications make money only in one way which is not hard to guess that is commissions.
Commissions
This is something that you don’t have to think about twice when someone asks you how an e-commerce platform makes money. Just like any other e-commerce platform commissions are its source of income. They charge a certain amount of commission-free on each product that is sold on their platform. Wish usually charges a 15% to 20% commission on the total sale. It also offers products for discounts. So in order to generate more money, it sells products in huge volumes for less price.
Conclusion
This is the business model of Wish. It has taken all the steps to establish itself as one of the best e-commerce platforms that are out there. Check out other interesting business models on Zeen like the business model of WeChat.
