Every morning, the founder of the company Wish Peter shulzhevskii up the stairs of a skyscraper sans street in San Francisco, passing through the floors of his palatial office. 37-year-old native of Polish descent Google has created an online store of Chinese goods no name for poor Americans. Most of his buyers are not working in these offices don’t live on the coast of Northern California. Users Wish — came from the American working class, living in Northwest Florida or East Texas Dollar Store buyers who can’t afford an annual membership to Amazon Prime for $120.
“41% of American households aren’t $400 cash,” says shulzhevskii, citing recent data from the fed. In 2018, the Wish was the most downloaded shopping app in the world, and now it is third in terms of sales electronic trading platform in the United States. Worldwide, about 90 million people use it at least once a month. Receiving 15% of sales, last year Wish doubled revenue, to $1.9 billion During the latest round the company was valued at more than $8.7 billion, and thus shulzhevskii as the owner of the share at 18% is considered a billionaire. (His co-founder Danny Zhang owned only 4.2%). Shulzhevskii says that investors can count on an IPO in the next year or two.
Wish — not the first application for online trading, which keeps track of every click buyers: Amazon, with annual sales of $200 billion also uses such data. Wish competes with AliExpress, owned by Alibaba, and Amazon, offering users an endless stream of Chinese-made products. But while Amazon continues to add features such as video broadcasting and delivery over two hours to convince buyers to join a membership program, Prime, shulzhevskii not particularly worried about delivery or quality. Sweaters for Wish cost $2 plus $2 for shipping, the fake Apple Watch go for $9 (plus $3 for shipping), and Android smartphones are sold for $27. Purchases can take weeks. Customers browse at an average of 600 to 700 products, about 80% of new users Wish to return a purchase for a second time.
The agreement between China post and the US postal service allows Shuliavska to transport goods weighing up to 2 kg at reduced rates. This criterion, correspond to about 15% of deliveries Wish. Sometimes it is cheaper to send the parcel from Beijing to new York than from South Carolina to new York. Many Chinese traders can’t afford to use the services of large companies like FedEx or DHL or to store the goods in foreign warehouses, as in the case of Amazon, said Zhang, who lives in Shanghai.
Wish loses about $90 million annually, but shulzhevskii claims that the company may make a profit, if no longer so much to spend on marketing. Wish staged a large-scale campaign in Snapchat is one of the largest advertisers on Facebook. In 2017, the company signed a three-year sponsorship contract for $30 million with popular in China NBA team “Los Angeles Lakers”. Los Angeles is one of the largest markets for the Wish from the point of view of revenue. Given the competitive environment these funds were probably spent. To put a surgical strike on Wish, Amazon recently opened section with the goods at a discount.
One of the most urgent problems in online retailer — the illegal or poor quality goods. On sites like Trustpilot and recommendations HighYa hundreds of negative reviews about Wish. Users unhappy with the lack of response from the support, sellers that have not sent orders, and low quality products. To solve the problem shulzhevskii hired Connie Chen, former Manager of communities in Facebook. She assembles a team of approximately 10 000 users Wish, which will help the company to get rid of questionable sellers in exchange for gifts and discounts. But Shulzhevskii issues of quality control appears not to bother, he emphasizes that sometimes the problem is the buyers. “We sell five million contact lenses a year,” he says. — Someone will go to sleep.”
The Soviet past
He grew up in Communist Poland in the 1980-ies, he was 11 years old when the Soviet Union collapsed and the family moved to the canadian Waterloo, a city 70 miles from Toronto. He studied at the University of Waterloo, graduates, founders of Kik Interactive and Instacart. In the classroom for mathematics and computer science shulzhevskii met another immigrant, Danny Zhang.
In 2004, shortly before graduation, shulzhevskii began a four-month internship at Google, where at that time worked at least 1,000 employees and was an active preparation for an IPO. He lived in a three room house in Palo Alto with three other interns, day scribbling code, and at night dealt with “iron”. Becoming a regular employee of Google shulzhevskii wrote early versions of algorithms to increase the number of keywords that Google sold the first advertisers to display advertisements in accordance with the search request. Advertisers began to spend more and this option has increased annual revenue Google about $100 million, says shulzhevskii.
In June 2007 he transferred to the new offices of Google in South Korea. Koreans prefer overloaded with information the search engines a clean, simple pages like Google. A former colleague at Google Shulzhevskii mark Rabkin recalls how they discussed these national characteristics. “I saw that he was starting to think like a local,” says Rabkin, who is now the head of the advertising Department at Facebook. This experience helped Shuliavska to form a strategy for the Wish: he had learned to do what you really wanted consumers and not what they were supposed to want, according to experts from Silicon valley.
Bet on smartphone
Shulzhevskii left Google in 2009 with the savings, which would be enough for a couple of years. He spent the first six months at home on the computer and wrote code for a program called ContextLogic, which predicted user interests based on their web behavior and correlated the data with potential product or advertisement.
In September 2010, investors put $1.7 million in ContextLogic, Shuliavska helped each CEO of Yelp Jeremy Stoppelman. “Their business plan was to compete with Google on AdWords in Korea,” recalls Jerry Yang, billionaire co-founder of Yahoo, which invested in through angel’s Wish Fund AME Cloud Ventures. But, he adds, “their technique was really good.”
A year later, in may 2011, shulzhevskii invited his University friend Zhang, then worked in YellowPages.com to join as a co-founder. They were thinking about creating an advertising business, and then met in San Francisco with a young venture capitalist Joe Lonsdale to discuss the idea of business in electronic Commerce and mobile format. More and more people used smartphones, but few made a purchase with them. Shulzhevskii was sure that he had only to apply the “Google methodology” to track the behavior of the buyer. Yang was skeptical. Amazon already has worked for 17 years and firmly stood on legs.
In 2011, Facebook found out about the program for recommendations Shulzhevskii and offered $20 million for the integration of ContextLogic its own advertising system or a program that ranked stories and posts in the news feed of Facebook. When shulzhevskii refused the money, one of his investors broke into a new startup office on pine street, shouting “go to work for someone who knows the business.”
But shulzhevskii continued to Refine the system. In late 2011, they Zhang launched the prototype Wish, Wishwall.me. With the help of advertising on Facebook they invite people to go and look at a selection of goods, selected Wish. Wish actually did not sell anything, did the other sites, but people could make wish-lists of products (the wish lists).
As soon as visitors “laykali” bath towels and Bicycle speedometers, the program gave them gifts and discounts, which kept the audience on the website. Wish gained tens of thousands of users, and then began to give advice. The platform has sent letters to dozens of sellers who do sell these products on eBay and Amazon. Wish promised to provide them access to a database of active buyers, but only if the seller will give a discount from 10% to 20%. At first, Wish not take a Commission. If the sellers have agreed, the service notified users about what their favourite product is now available at Wish with a discount.
When Hans Tung, GGV Capital investor met with Shuljevskiy in October 2013, he was struck by the geography of sales Wish — most of the buyers have not lived in new York and California, Florida, Texas and Central regions of America. Tang immediately saw the resemblance to TaoBao marketplace, owned by Alibaba, which was close to becoming the largest in the world, but focused on China. “Wish there was a mobile TaoBao for the rest of the world,” says Tang.
To Deny Bezos
In 2016 shulzhevskii refused another buyer, this time to his idol. A top-the Manager close to Jeff Bezos, contacted Shuljevskiy and invited him to Seattle to meet with Amazon’s founder. Before the meeting shulzhevskii wrote assistant Bezos to clarify that he is not going to sell the company. “But he still wanted to meet,” recalls shulzhevskii. Citing a confidentiality agreement, shulzhevskii reluctant to talks about the incident, but said that Bezos “was not too forward” about the offer to purchase. The meeting was attended by corporate lawyers Amazon, as is usually the case in negotiations on the purchase. “They had their goal,” say it. (For its part, Amazon has refused to comment on “speculation”).
Wish grew rapidly, but the number of problems with quality control increased. The website had one million registered sellers, of which 125 000 are active on a Wish every month. For comparison, on Amazon was about 2.5 million active sellers, and Walmart is 21 000, according to the research company Marketplace Pulse.
“I underestimated the complexity [of quality control]. These vendors are doing interesting things,” says shulzhevskii, raising an eyebrow in a sign that he has something to tell. For example: one seller offered on the Wish tablets for $70, but buyers received in the mail a small stand with a note saying that the tablet will be delivered shortly.
Last year, the press criticized the Wish when it was revealed that cosmetics could be the cause of conjunctivitis. To address problems with unscrupulous sellers Wish automatically blocks about 8 million products per week, or about 3% of the goods available on the website. Most are locked because users have reviewed the subject at least 1000 times and not clicked on it once. Wish to block goods from sellers who get bad reviews or post fake. For automatic tracking of counterfeits engineers Wish I were teaching a program on the obviously fake reviews.
If the algorithms Wish to notice that the seller has placed counterfeit goods or sent the order with a fake tracking number, he will be “fined” $500. Sending a parcel without goods face a fine of $10,000. Wish monthly charges fines totaling about $3 million, and can do it, just not transferring payments to sellers, says shulzhevskii.
Zhang, which is 6000 miles, and controls operations in three locations in China with 150 employees, exactly the same fears of deception. “Sellers definitely first of all think about money,” says Zhang. The rules and system of monitoring is not always effective. “Sellers perceive the Wish platform as a very mechanical,” he says.
“Perfection will not recognize tan, investor from GGV. — You get what you pay for”. But shulzhevskii is more optimistic.
Translation Natalia Balabanchevo
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