Wish Mobile E-commerce Platform Business model

Wish is a mobile-first e-commerce platform in which users’ experience is based on discovery and customized product feed. Wish makes money from merchants’ fees and merchants’ advertising on the platform and logistic services. The mobile platform also leverages an asset-light business model based on a positive cash conversion cycle where users pay in advance as they order goods, and merchants are paid in weeks.



The framework used for the analysis

The VTDF framework is the basis of the analysis.

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Origin Story

Former Google engineer Peter Szulczewski joined the company back in 2004 as an intern, and there he stayed, in the California office until 2007.

In 2007, he moved to South Korea, where Forbes explains he learned a lesson in what mobile e-commerce looked like.

Rather than the clean, minimalist style so much loved in the Valley.

Koreans preferred portals crowded with information, which looked more like a bazaar than a temple.

This lesson would prove extremely valuable, as we’ll see to shape Wish’s experience, a mobile e-commerce platform that is all except clean or minimalist, with elements of gamification and personalization all across the platform.

By 2009, Szulczewski, with enough money to live off for a couple of years, coded an application that would match a user with potential product advertising based on the same browser history.

He would call it “ContextLogic” (which name would stick, as ContextLogic Inc. is the corporation behind Wish).

By 2010, Szulczewski would get the first round of investment from Yelp CEO Jeremy Stoppelman.

Yet, the idea at the beginning was all about advertising and how to track users at the point of offering a customized advertising experience and potentially competing with Google.

Only afterward, by 2011 Szulczewski, had his friend Zhang joined as co-founder, and he would shift his focus toward mobile e-commerce.

And the idea didn’t seem that great, given that would mean competing with giants like Amazon.

By 2011, as Szulczewski got an offer from Facebook’s Zuckerberg to buy its technology, ContextLogic, for $20 million, as reported by Forbes, Szulczewski refused the offer, which upset investors and risked putting an early end to his venture.

Then by 2011, the embryonic version of Wish, which at the time was called Wishwall.me, was born. Indeed, this worked as a wish list where users could flag the products they wanted (which Wishwall.me didn’t have yet but only showed) and build up a sort of list where they would earn rewards.

To gain traction quickly, the platform didn’t ask for commissions from merchants, but only reduced their prices for them so that users could get rewarded with discounted products.

The idea seemed to be taking traction. Over the years Wishwall.me which transitioned to become Wish, got over $2 billion in funding and evolved to become a mobile e-commerce platform with elements of gamification, Where e-commerce platforms, like Amazon had been built with the promise of fast delivery and a balance between cost and convenience, Wish had built a name (sometimes even a bad name) for cheap stuff, mostly from Chinese merchants, often delivered within weeks.

And yet it turned into a multi-billion dollar platform, and now to scale further, of course, it’s tackling the problem of preventing bad merchants on the platform as it scales further.

How the Wish platform scaled over the years by also adding Merchant Services, from the Wish Merchant Dashboard, the Wish Express, the ProductBoost (to advertise merchant’s products on the platform), and all the other programs to attract more merchants (Image Source Wish Prospectus).

Value model

Started in 2010 with the vision to bring an affordable and entertaining mobile shopping experience.

The whole value model moves around offering a variety of products, with a gamified mobile experience and low prices.

As we’ll see, the value model is enhanced by a platform with a discovery-based mobile experience.

Mission and vision

Wish has a simple mission—to bring an affordable and entertaining mobile shopping experience to billions of consumers around the world.

Since its founding in 2010, Wish vision has been to unlock e-commerce for consumers and merchants, by providing consumers access to a vast selection of affordable products and by providing merchants access to hundreds of millions of consumers globally.

The whole point of Wish then is about democratizing mobile commerce by making it affordable and accessible to anyone.

Value propositions

The two key stakeholders for the platform are consumers and merchants.

Value propositions for consumers

  • Affordable, as merchants on the platform offer primarily unbranded products that can be discounted as much as 85%.
  • Accessible, Wish was born as a mobile platform, as such it’s all about a great mobile experience for consumers.
  • Global, the platform is available worldwide.

Value propositions for merchants

As of 2020, Wish counted over 100 million monthly active users, which worked as an attractive option for merchants to sell their products.

In addition, Wish also offers a set of tools to those merchants to grow their business through Wish.

How big is the total addressable market?

The mobile commerce market is among the fastest growing markets of the last decade and has now become a multi-trillion dollar market.

Technological model

As of 2020, the Wish mobile e-commerce platform was accessible to over 100 million monthly active users and over 500,000 global merchants.

The core value of the Wish platform is to be positioned as affordable, open, and accessible to both users and merchants at the global level.

The three competitive advantages that Wish claims from a business standpoint are product, technology, and data science.

While Wish focuses on the mobile shopping experience which needs to be affordable, personalized, and entertaining (through elements of gamification).

For merchants Wish works as an amplifier, easy to set up a selling solution that makes them tap into a global user base, and a suite of services to help run their online businesses.


The global mobile e-commerce platform of Wish focuses on two key elements: User Services and Merchant Services.

The key elements of the mobile e-commerce platform for users are the mobile-first experience (Wish is born as a native mobile e-commerce platform), personalized (through recommendation engines), discovery-based (beyond searching, users can easily find related products or based on their tastes or previous purchasing decisions), and entertaining (there are many elements of gamification on the platform to make users spend more and more often while enjoying the discovery of new products). For merchants, it’s all about demand generation (tapping into a platform with over a hundred million claimed monthly active users), and data intelligence to gather insights about customers gained via the platform, logistics, and business operations (Image Source: Wish Prospectus).

How technology enhances the value proposition for consumers

Wish consumer experience moves around a few key pillars:

  • Mobile-First: Wish was primarily built for the mobile experience, with image-rich navigation, and most purchases happening through the mobile platform.
  • Discovery-Based: As a mobile platform, Wish has a built-in discovery engine that offers potential products for users without them inputting a specific brand name. Indeed, Wish reported over 70% of its sales in 2020 came from personalized browsing, where the users didn’t input any search term or predetermined brand in mind.
  • Personalized: Another core element of the Wish mobile platform is the personalization at scale. Wish claims that no user will have a product feed looking exactly like another user on the platform. This is possible through a curated feed of products, built through Wish big claimed big data technology. Indeed, in 2020 65% of users arrived at product pages through their personalized product feed.
  • Entertaining: In the users’ product feed, there are gamification elements, interaction, and social media-like features to increase the length and frequency of a user’s sessions and drive increased engagement. In 2020, users spend, on average, over nine minutes per day on the Wish platform to gain a bit of context.

How technology enhances the value proposition for merchants

The core value for merchants is the access to a wide range of local, mobile consumers, globally (Image Source: Wish Prospectus).
  • Demand Generation and Engagement: with a global platform that offers promotional tools (like ProductBoost) to enhance store visibility further.
  • User-Generated Content Creation: assuming the merchant offers good products, users will offer reviews, ratings, photos, and videos, which help other users make a faster purchasing decisions and cut the costs for merchants in terms of content production.
  • Data Intelligence: through data insights (merchants have access to the Wish Merchant Dashboard to track total impressions, sales, product assortment service quality, fulfillment, shipping needs, and refunds) and revenue growth, as users are displayed products they might likely buy, a complex mechanism that if merchants were to build from scratch might be extremely expensive.
  • Logistics: Wish offers a whole set of shipping services (especially for cross-border activities), and local pick-up (Wish has almost 50,000 partner pick-up locations in proximity to users across the globe, as part of its localized pickup programs).
  • Operations with tools and services, especially to deal with international commerce and support to deal with international compliance, payment processing,m and user support.

Data Science As The Competitive Moat

As Wish claims a set of proprietary big data, and intelligence tools developed over the years, let’s see some of the use cases when those are used.

  • User Acquisition through customized product feeds that leverage proprietary data.
  • Dynamic Pricing with prices varying across products to optimize conversion by taking into account the characteristics of the product and the user to estimate price sensitivity.
  • User Personalization to generate a customized experience (no user has to have the same experience as another user on the platform).
  • Merchant Insights with the Wish dashboard offers built-in analytics to help merchants sell more products and track their performance.
  • ProductBoost which is the Wish native advertising tool for merchants and data science here is used to optimize the budget allocation for merchants on the platform to achieve conversions.

Distribution Model

Wish claimed flywheel moves around users and merchants. The more users join the platform globally, the more merchants will want to set up their stores.

This will enable a more customized experience for users, which will improve engagement and conversions, and therefore further attract merchants. Simultaneously, user-generated content will make the whole merchant experience more compelling, improve product variety, reduce costs for products and therefore drive more traffic.

The Wish flywheel starts by building users’ traffic on the platform; this enables them to gather data and customize their experience and product feed. This personalized experience becomes a learning curve for Wish, strengthening its algorithms, making the platform more valuable as users’ conversion and engagement increases. This makes more merchants willing to join the platform, offering more products and lower prices to attract more users further. As more users join with a larger product variety, Wish has more content to play with to customize the user’s product feed, increasing the engagement and conversion on the platform so that more and more merchants will want to join in.

Wish Growth Strategy

Users’ Growth Strategy

Wish growth strategy for users moves around a few key directives:

  • Acquire New Users. 
  • Drive Conversion. 
  • Drive Lifetime Value from Existing Users.
  • Expand Geographically. 
Merchants’ Growth Strategy

Wish growth strategy for merchants moves around a few key directives:

  • Diversify the Merchant Base and Expand Product Categories. 
  • Broaden Merchant Services. 
  • Expand Logistics Platform. 
  • Grow the Wish Local Offering. 
Platform Enabled Growth

Wish growth strategy built into the product/platform moves around a few key directives:

  • Monetize Brick-and-Mortar Stores. 
  • Add New Product Categories. 
  • Expand to New Advertising Partners. 
  • Grow First-Party Sales (with the further growth of Wish’s own label).
  • Open the Commerce Platform to Additional Businesses. 
Gamification As A Growth Lever

Wish’s growth strategy also leverages gamification and tries to make the experience as entertaining as possible through gamified features in place of passive discount codes. A key element is a mobile platform. Some examples:

  • Blitz Buy offers once a day sales, on a selection of extra discounted products. Users spin a wheel to find out the number of products that will be in their daily Blitz Buy selection.
  • Daily Login Bonus where users receive a stamp for every day they visit the Wish app. For instance, if users acquire seven stamps within a one-month period, they receive an offer for up to 50% off a future order.
  • Limited Quantity Deals Wish LQD feature offers users deals throughout the day pricing higher-cost items at under a dollar for a limited time only.
  • Add to Cart Offer unlocking discounts as users browse putting items into their carts with surprise offers, a key element of the gamification experience.
  • Periodic Sales where users are offered personalized sale events on a periodic basis.
  • Community TV section to highlight the video user-generated content on the platform.
  • Referral Program where users have the ability to earn up to $100 of Wish Cash by inviting friends to the platform who make a purchase.

Financial model

As a mobile e-commerce platform, it’s critical that the acquired traffic is converted into product purchases.

Wish acquires users cheaply, and it turns them into increased conversion as their experience gets customized.

The Wish business model is asset-light as it doesn’t source merchandise nor hold inventory (Wish leverages local partners across the world).

Revenue model

All the demographics for the Wish user base (Image Source: Wish Prospectus).

The company generated $1.9 billion in revenues by 2019, and it consisted primarily of marketplace and logistics revenues.

Let’s break them down:

  • Marketplace revenue (those comprise the Core Marketplace revenue and ProductBoost revenues):  the marketplace services to merchants include a set of tools for merchants while the ProductBoost services help merchants promote their products within the Wish marketplace. Marketplace revenue includes commission fees collected when users purchase the merchants’ products, which commission will vary based on several factors (such as product type, location, and other specific features).
  • Logistics revenue: which comes as direct end-to-end single order shipment from a merchant’s location to the user’s location. Those services include transportation and delivery and merchants will prepay for logistics services on a per order basis.

Cost structure

  • Cost of revenue consists primarily of colocation and data center charges, interchange, and other fees for credit card processing services, fraud and chargeback prevention service charges, and costs of refunds and chargebacks made to users.
  • Sales and marketing are primarily driven by the acquisition costs of users through social media and search engines, paid advertising, outsourced user support services, sponsorships, and local marketing campaigns, business development expenses for attracting merchants, and conducting ongoing merchant education.
  • Product development consists primarily of salaries for engineers and other employees involved in product development activities.


In 2019, Wish generated a net loss of $129 million, compared to a net loss of $208 million in 2018. For the nine months ended September 30, 2020, Wish generated a net loss of $176 million, compared to a net loss of $5 million for the nine months ended September 30, 2019.

Cash generation and management

While Wish records net losses, it still has positive cash flows.

This is possible through its asset-light business model and the fact that it receives upfront payments from users.

Simultaneously, it remits payments back to merchants weeks later; this mechanism is well known to Amazon.

It’s at the core of a positive cash conversion cycle and how a financial model can turn into liquidity to expand its operations quickly.

Indeed, where the company had a cumulative net loss in the last three years, it instead recorded a net cumulative cash flow from operations of $16 million from 2017 to September 2020.

Business Model Highlights

  • Started as software to match users’ intent with product advertisement, Wish (at the time called ContextLogic) pivoted into a mobile e-commerce platform throughout the 2010s. While traditional e-commerce platforms, like Amazon, would prioritize a cleaner experience, Wish offered a “rich experience” with gamification elements, which looked more like an online bazaar.
  • Wish runs an asset-light business model, where contrary to business models like Amazon, it does not carry inventory either deliver goods. Instead, Wish leverages local partners to deliver stuff in remote locations worldwide, and cross-border partners to deliver goods worldwide. This enables it to work with the digital platform’s logic by collecting fees from merchants’ services and advertising on the merchants’ platform.
  • The company’s revenues are skewed toward the marketplace (with merchants’ fees and advertising revenues) and logistic services.
  • Wish’s logic is all about the product feed, a personalized experience for shoppers, which is more similar to social media, than a search engine. Indeed Wish tries to minimize the number of searches users make, and in fact, most of the purchases on the platform happen from users’ product feeds.
  • As a mobile-first e-commerce platform, the experience is skewed toward discovery, gamification, and conversion, less toward search and intent discovery.
  • As an e-commerce platform, Wish still leverages primarily on third-party merchants’ sales; however, it has also been selling its own labeled selected brands.
  • While the company loses money, it still has positive cash flows, as it is asset-light. It runs on a positive cash conversion cycle by collecting money from users in advance and paying merchants after weeks from the collection, unlocking short-term liquidity for the business operations.

Read Next: E-commerce Business Models, Amazon Business Model, Cash Conversion Cycle, Gamification.

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