An online dollar store’s rise and fumble

There were unbelievable bargains on “bestdeeal9,” a store hosted on the e- commerce platform Wish, including a $ 2,700 smart TV being sold for $ 1 and a gaming computer advertised for $ 1.30.

But none of the offers were real, and Wish knew it.

The company, an online novelty emporium that had more than $ 2 billion in sales last year by dangling hard- to- believe discounts, created “bestdeeal9” as an experiment. Listings that had been removed for violating Wish policies were reposted on “bestdeeal9” and used in part to track whether shoppers complained when their orders never arrived.

Employees working on the project repeatedly pushed executives to take down the store, arguing that it was illegal and unethical, according to three employees familiar with the project who spoke on the condition of anonymity to discuss company matters. More than 213,000 people made purchases from the store, according to an internal document reviewed by The New York Times, although the document did not say how many received their items.

Tarek Fahmy, then the senior vice president of engineering in charge of the project, ended it in 2020 after it operated for several months, the employees said. Fahmy, who has since left Wish, did not respond to requests for comment. Wish declined to comment on “bestdeeal9.”

Several employees said “bestdeeal9” is indicative of the kind of practices — giving priority to short- term growth over customer service — that initially turned Wish into an advertising and retail behemoth but have now left it desperately trying to right itself.

Since its founding in 2010, Wish had many of the hallmarks of a classic Silicon Valley success story: started by a young coder and his college friend, rumored to have turned down a $ 10 billion acquisition offer from Amazon and described by Recode as an app “that could be the next Walmart.” It developed a reputation as the dollar store of the internet, shipping odd gimcracks and thingamajigs directly from vendors in China. It blitzed shoppers with viral online ads for $ 1 plastic tongue clamps, $ 3 “leather face diapers” for cats and a $ 2 handful of worms.

For a while, the company was

the top advertiser on Facebook and Instagram and among the biggest on Google, spending more than $ 1 billion on sales and marketing last year. The Los Angeles Lakers won the NBA championship in 2020 with the blue Wish logo on their jerseys, thanks to a multiyear marketing partnership.

The company had 1,218 employees at the end of 2021; half of its six offices were in China. At the headquarters in San Francisco, there were catered lunches, a bar for happy hours and parties, and a cafeteria with floor- to- ceiling views of downtown and the Golden Gate Bridge.

Peter Szulczewski, the company’s former CEO, once compared Wish’s success to Donald Trump’s 2016 election victory, explaining that both the company and the candidate had appealed to “the invisible half” of Americans who were routinely overlooked by political pundits and Silicon Valley elites.

But Wish squandered its early promise, according to interviews with nine former employees. Deceptive experiments like “bestdeeal9” drove customers away, as did low product standards and unreliable shipping. When the rising cost of ads forced it to scale back its marketing, the company struggled to attract new shoppers.

Wish is now scrambling to turn itself around. The company declined to make its newly hired crop of executives available but said in a statement that “over the past six months, Wish has undergone a massive transformation.”

But for Wish, making growth the priority over all else proved to be crippling in the long run. Even with stricter quality controls on products, merchants and delivery, revenue in Wish’s most recent fiscal quarter plunged 76% from a year earlier, it reported May 5. There were 27 million monthly users at the end of the first quarter, compared with 101 million a year earlier. The company went public in 2020 at $ 24 a share and but recently traded at less than $ 2.

“Companies are supposed to evolve and mature,” said Christian Limon, who was Wish’s head of growth and acting chief marketing officer in 2016 and 2017. “The easiest way to say what happened is that what worked for it stopped working and it never evolved.”

The company’s founders, Szulczewski and Danny Zhang, had been math students at the University of Waterloo and recruited their first 10 employees from the Canadian school’s math department. In an interview with his alma mater, Szulczewski described Wish as “very embedded in a culture of logic.” He and Zhang did not respond to requests for comment.

After graduating, Szulczewski became a software engineer at Google and took inspiration from the tech giant’s powerful automated ads business while building his own company, Limon said.

Consumers have complained to the Better Business Bureau about Wish products that never arrived or were unrecognizable when they did. France, which was one of Wish’s largest markets, ordered search engines and mobile app stores last fall to remove the company from their online listings, citing the presence of dangerous appliances and other products. Merchants on Wish faced lawsuits from companies like Peanuts Worldwide, which owns characters from the popular comic strip, claiming trademark infringement and counterfeiting.

Still, Wish, which is run by a parent company called Contextlogic, did well early in the pandemic, as stay- athome mandates stifled competition from physical retailers. But last year, as shoppers were venturing out more and becoming less engaged on Wish, digital advertising was also becoming more expensive, causing the company to scale back its spending. ( It said it planned to pick up the pace this summer.)

Four employees said Wish’s long delivery times grew even lengthier during the pandemic, amid supply chain disruptions. Without informing customers, the company began to extend its delivery deadline on orders that were running late to avoid having to pay out refunds, the employees said.

Wish has recently announced more accountability measures for merchants Existing sellers will be evaluated on metrics like customer reviews, with perks like greater exposure for top performers. New merchants ( which the company said now include more sellers from outside China) must qualify to join.

Last winter, Wish hired Vijay Talwar, a former executive at Foot Locker and Nike, to take over as CEO after Szulczewski stepped down.

But many see reason to hope: Talwar came into the office every morning early in his tenure to walk the halls and chat with people. This year, to alleviate burnout among employees, Wish began offering one day off each month as a “global refresh day.” The company has also been responding to negative comments on Glassdoor with promises to do better.

“We are going through a lot of new growth,” the company wrote under one review, “and a great deal of change.”