The Synopsis Article. The Future of Ecommerce That Wasn’t: An In-depth Look into What Went Wrong with Wish
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Jan 26, 2024 This podcast discusses the failure of Wish, an e-commerce platform. It compares Wish's unique approach to Amazon's and analyzes the reasons behind Wish's failure, including ineffective advertising. The podcast also explores the factors contributing to Wish's success and downfall, such as their user acquisition engine and direct relationships with manufacturers. It addresses criticisms of low-quality products and slow shipping times. The struggles in attracting new shoppers and the impact of rising advertising costs are also discussed.
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Counterfactuals in Business Analysis
- Webvan and Pets.com initially seemed like unrealistic ideas, but similar businesses like Instacart and Chewy later thrived.
- Apple's closed ecosystem, once criticized, became a key strength, and Crocs' ridiculed design became a major selling point.
Marketing Spend vs. Effectiveness
- High sales and marketing spending isn't inherently bad; its effectiveness matters more.
- Pinduoduo, despite high initial spending, achieved marketing leverage, unlike Wish.
Types of Marketing
- Marketing leverage is key: as revenue scales, marketing spend percentage should decrease.
- There's growth marketing for new customers and maintenance marketing for existing ones.