Dissecting the Cases of Temu and Wish—Why One Won and The Other Lost

Distinguishing between a fleeting trend and a fundamental shift is crucial for anyone looking to make their mark in the ecommerce space. 

In fact, it’s not just about having an online presence anymore—it’s about understanding the intricacies of digital commerce platforms and navigating the complex web of consumer expectations, supply chain logistics, and competitive differentiation. 

This reality brings to light the stark contrasts in the trajectories of ecommerce platforms…

Especially when examining the cases of Temu and Wish.

Why does one platform soar to remarkable heights while another struggles to maintain its foothold? The answers to this question are multifaceted and reveal much about the critical success factors for ecommerce businesses today. 

Ecommerce marketplaces temu and wish

In a recent episode of The EcommOps Podcast, hosts Dayu Yang and Simon De Raadt delve deep into the contrasting paths of Temu and Wish. They dissect the strategies that led to Temu’s ascent and Wish’s challenges, offering a treasure trove of insights for ecommerce entrepreneurs and direct-to-consumer brand owners.

Their discussion is not just an analysis; it’s a guidebook filled with actionable advice for navigating the complex ecommerce ecosystem. From mastering supply chain efficiencies to aligning closely with consumer needs, the episode serves as a roadmap for any ecommerce business aiming to not just survive but thrive in the digital age.

If you’re at the helm of an ecommerce venture, seeking to understand the dynamics of platform success, or simply intrigued by the factors that dictate the rise and fall of digital marketplaces, this episode of The EcommOps Podcast is an essential listen.

Here are some of our favorite takeaways from Dayu and Simon’s conversation.

Key Takeaways

1. The success of a platform hinges on managing both supply and demand effectively.

Once a brand learns how to manage and cultivate both (and not just separately), it becomes far easier to achieve an effective workflow that ensures business sustainability in the long run! 

Simon further backs this takeaway up, saying:

So the main takeaway for us, for me at least, definitely, is the platform model works. Unless you don’t have control on either the supply or the demand. No longer. This can be seen separately. This is crucial. And then the consumer in the end is going to be the winner, in my opinion, whatever platform is coming afterwards that might want to compete.

Regardless of the size of your firm, learning to manage both your supply and demand (and not just focusing on one or the other) will serve your interests best while equipping your business best with a strong operational foundation.

2. A marketplace model, as seen with Wish, without adequate oversight can lead to poor customer experiences due to supplier inconsistencies and a lack of accountability.

While the approach was intended to maximize options, this strategy backfired on Wish because it diminished its control of the supply chain and eventually led to widespread customer dissatisfaction.

In Dayu’s opinion, he believes that Temu doing the exact opposite of Wish’s approach to supplier sourcing makes for a better long-term strategy:

Ecommerce marketplace action temu vs wish

Actually, Wish was open up for, if you remember, it was open up for any supplier who wanted to sell any product. Temu is selecting the supplier.

So let’s say this microphone, I’m not going to sell this microphone hundreds of times. I’m going to let the suppliers bid against each other themselves to get the best one with the best quality, best price. And that one is going to get listed. Once they get listed, they will get the orders. The same they do even with the supply chain, with the logistic companies, anyone that want to do their shipping, they have certain criteria that they have to fulfill—otherwise they get a penalty.

There’s a lot of penalty clauses for both suppliers, logistic companies, any service provider around their platform. That’s very much the different model compared to Wish, where it was much more open for anyone to participate.

Having a more selective process with more stringent standards when choosing suppliers is one of the most impactful and practical practices you can have which will help you grow and scale better. 

3. Temu, supported by Pinduoduo, reaps the advantages of close cooperation with factories, aligning supply with consumer demand and contributing to a more robust supply chain.

Doing this allows Temu to make lighter work of its back-end while freeing up more resources and time for its front-end, allowing it to meet its maximum growth potential—as Dayu says:

If you want good quality products, efficient inventory planning, it is very much a mutual conversation that is required with your supplier, with your factory, both in terms of things like making sure that your product quality is on par and also making sure that your inventory is produced and shipped on time as efficiently as possible. And this is really the supply chain innovation that came from PDD, utilized in Temu and really the biggest driver of Temu’s success.

With the help of close cooperation between your business and its suppliers, you’ll be able to meet consumer demand better and build a more flexible system that’s outfitted with scalability and efficiency.

4. Temu’s marketing strategy is straightforward about product origin and shipping durations, setting practical customer expectations and contributing to its success.

Compared to Wish’s approach where it was self-touted as “the next Amazon” with minimal transparency, the Pinduoduo-backed giant took a more authentic approach that serves its strategies and markets best. 

Trust terms and conditions ecommerce

Dayu shines a light on this key to Temu’s success, saying: 

A well, a question to viewers out there who think that Temu is not shipping from China. I mean, virtually no one, I mean, everyone knows that Temu ships from China and their entire slogan is ‘Shop Like a Billionaire’. Now obviously that’s not literal. I mean, shop like you feel like you’re a billionaire because everything is so cheap. Everything is ridiculously cheap, right? And they’re very honest about it. And again, they say they ship from China. They say it’s going to take a week, 14 days. That’s their entire model. And this is kind of where it’s such a big difference from. Especially when Wish first started out.”

By being more transparent and authentic with your marketing (such as mentioning where your products are from and how long shipping times are), you’ll build stronger customer relationships and manage expectations.

5. Long-term business viability in ecommerce depends on a good initial customer experience, honest marketing, and a sustainable supply chain that can meet the promises made to the consumer.

Together, these three key factors can shape the future of any DTC ecommerce brand for better or worse because of how they impact business productivity and consistency.

Here’s what Dayu had to share about this key takeaway:

I think my big takeaway from this is really just thinking about focusing on the consumers themselves. I think at the end of the day, the consumers tend to win after everything is sorted through in every industry. Now, that’s on average, which means that there’s going to be a lot of losers in terms of storefronts, businesses in the middle. Right. However, if you as a DTC store owner or brand are thinking about the long run (honest marketing and sustainable supply chains), you really got to think about the consumers, your end consumers themselves.

As soon as you shift your focus toward building better customer experiences, marketing, and supply chains, you’ll have an easier time achieving a Temu-style growth while avoiding the same mistakes Wish made. 

Final Words

The EcommOps Podcast episode 4

This episode of The EcommOps Podcast, featuring the insightful dialogue between Dayu Yang and Simon De Raadt, is a must-listen for anyone navigating the ecommerce landscape.

By dissecting the successes and pitfalls of Temu and Wish, this discussion sheds light on the pivotal strategies that can make or break an online platform. Whether you’re a budding entrepreneur in the digital marketplace or steering an established ecommerce brand, the insights from this episode equip you with the knowledge to discern between effective and ineffective ecommerce strategies.

Understanding the nuances of consumer expectations, supply chain management, and platform differentiation can transform your approach, guiding your business from its current state to the heights of industry leadership.

If your goal is to not only survive the competitive ecommerce arena but to thrive and dominate, the lessons from this episode of The EcommOps Podcast are your blueprint for success.

If you loved the insights from this in-depth episode on branding and brand experiences, you can access more of The EcommOps Podcast’s insightful episodes on our website. Follow us on LinkedIn for the latest updates. 

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