Wish Sells at a Bargain as Consumers Seek More Reliable eCommerce

Discount eCommerce company Wish has sold at a much lower price than might have been expected, a move that comes as eCommerce shoppers increasingly seek out trustworthy channels and reject unreliable merchants.

The shopping platform’s parent company ContextLogic announced Monday (Feb. 12) the sale of the company, valued at approximately $173 million, to Southeast Asian eCommerce platform Qoo10.

“Upon close, we expect the new Wish platform will have an improved customer experience through increased product assortment and merchant selection,” ContextLogic CEO Joe Yan said in a statement. “And for our merchants, we will be able to offer fully integrated logistical capabilities to deliver unmatched cost-efficient services with high quality control and transparency.”

Additionally, Tanzeen Syed, chairman of the board at Wish, noted that the board “believes the transaction will effectively reduce the cash burn in ContextLogic to near zero” while allowing the company to “monetize its operating assets at the highest value possible.”

The eCommerce platform, founded in 2010, rose to prominence throughout the decade, reportedly reaching the status of most downloaded U.S. shopping app in 2017 and of most-downloaded eCommerce app worldwide in 2018. Yet it has been struggling for years, most recently reporting a 52% year-over-year decrease in revenue in Q3 2023 on top of a 66% drop a year earlier.

The news comes as Wish has lost the trust of consumers over years of unreliable results, arriving months after the site announced that it was exploring “range of strategic alternatives.” Listicles have circulated across the internet detailing instances where consumers received products significantly different from what they expected.

A New York Times story in 2022 detailed how the site’s “low product standards and unreliable shipping” as well as other practices unfriendly to consumers (such as reportedly running a “bestdeeal9” store knowingly selling products that violated the site’s policies in part to see whether customers would file complaints) are said to have eroded shoppers’ loyalty.

In fact, consumers are increasingly turning away from online marketplaces toward brands’ direct digital channels, according to the PYMNTS Intelligence report “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” which draws from a survey of more than 3,500 U.S. consumers.

The results reveal that three-quarters of consumers consider trust to be a pivotal factor in their choice of eCommerce merchant. Plus, 15% of those shopping directly from brands cited the level of trust they have in a store as the top concern influencing their choice, while only 4% of those shopping from an online marketplace said the same.

Moreover, the 2022 study “Satisfaction In The Age Of eCommerce: How Trust Helps Online Merchants Build Customer Loyalty,” a PYMNTS Intelligence and Riskified collaboration based on a study of more than 2,100 U.S. consumers, found that 41% percent of online retail shoppers are “very” or “extremely” likely to switch to a new merchant if they believe the online merchant they are using is no longer trustworthy, and 48% are “somewhat” likely to switch away from a merchant they no longer find trustworthy.