Wish sale to Singapore’s Qoo10 raises competition for Temu, Shein
Global online shopping platform Temu is already climbing the ranks in the US Apple Store.
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Hours after Super Bowl viewers were bombarded with ads from discount retailer Temu, an online dollar store that used to be bought at a price that reflects how difficult it is to grow in maintaining e-commerce.
Wishwhich was valued at $14 billion at the time of its IPO in 2020, said Monday that it has been acquired by Singapore’s Qoo10 for $173 million in cash, 99% below its peak price.
Founded in 2010 and based in San Francisco, Wish made a name for itself with ultracheap products sold mostly by Chinese manufacturers. Co-founder Peter Szulczewski bet that customers would be willing to accept weeks-long delivery times in exchange for bargain basement prices.
Temu’s marketing blitz, which covered Facebook and Instagram well before Sunday’s Super Bowl, is also familiar to anyone who followed Wish. The company spent heavily on Facebook platforms to attract customers, and reached an agreement to put its logo on Los Angeles Lakers jerseys.
But the company was bleeding money, and last November, after ousting Szulczewski as CEO, it said it was exploring other strategic options.
Qoo10 now takes on Temu and Shein, who both originated in China and still have strong ties to the world’s second largest economy. TikTok, which is owned by China’s ByteDance, also launched an online marketplace in the US last year. The companies have shown that they are willing to spend a lot of money to attract customers, as well as lose money on selling cheap products by offering free shipping and big discounts.
Their ad spending boosted Meta’s top line, but it has hurt sellers like handmade goods seller Etsy, which last year acknowledged that Temu and Shein were “taking a small share of the everyone. “
During and shortly after the Super Bowl, Temu ran a bunch of “shop like a billionaire” ads and racked up $15 million in donations. For the second year in a row, brands shelled out about $7 million for 30 seconds of advertising time during the game.
Temu is estimated to have spent between $600 million and $1.4 billion on ads in the first nine months of 2023, Stifel analysts wrote in a note last November. Temu’s company projects an average of 70 million monthly active users over the same range last year.
Temu, which launched in late 2022, has deep pockets thanks to its parent company PDD Holdings. Shein, founded in 2012, began aggressively advertising on social media in the past few years.
Wish’s new owner may be joining the party as the hype dies down. Analysts at Morgan Stanley wrote in a note late last month that the number of US households shopping on Temu continues to decline, while web traffic and app usage data “also show a halt/decrease” practice from October, even through the holidays.”
Watch: Temu sees fewer new users posting Super Bowl