The Absurd Economics of Wish, AliExpress, and Temu

Temu is everywhere, promising that you can shop like a billionaire buying $10 wireless speakers, $12 sneakers, $20 drones and other cheap gadgets, clothes, backed with the promise of free shipping, 90-day returns, 30-day price adjustments, and deliveries within 2 weeks. But Temu isn’t the first to sell generic, unbranded, mass-produced Chinese products online at radically low prices. Before Temu, there was AliExpress and Wish - who both went to market decades ago with the exact same value prop, unbelievably low prices, and wacky advertising.

Wish was the earliest entrant into this space and the SF-based startup was once one of Silicon Valley’s darling unicorns. It all begs the question - how exactly do these companies stay alive selling $5-10 items online? In this episode, we’ll cover the business of selling cheap Chinese-made junk online through the rise and fall of Wish, the persistence of AliExpress, and the sudden emergence of Temu - and how all of this ties back to greed, growth and Silicon Valley.

0:00 The Dollar Store Platform
8:20 The Rise & Fall of Wish
16:32 Irresponsible Burn
30:50 Fool Me Three Times

[ModernMBA]

0:00 The Dollar Store Platform
8:20 The Rise & Fall of Wish
16:32 Irresponsible Burn
30:50 Fool Me Three Times

[TheRealE.B.]

It's terrifying to think that Amazon is seen as "high-end" e-commerce.

[moth.monster]

It's worth noting that unless you really search a lot, Amazon also shows you the same cheap garbage that Aliexpress, Wish, and Temu do, but at a higher price.

[stevedwrd]

imagine paying a $4 piece of low quality plastic in 4 bi-weekly payments with Klarna

[sekalf]

I worked as a mailman when Wish became popular. It was insane, we had mountains of those freaking tiny grey packages. Some costumers had 30-40 Wish packages delivered every day, for months.

[belot]

eBay and Etsy are almost as flooded by this stuff as Amazon at this point.

[patty]

Any sales website that starts with a fake wheel of fortune discount is immediately rejected and closed by me.

[Allen-qsxr]

It's ironic that rollo is sponsoring this because I've been in e-commerce logistics long enough to know it's just the same kind of business.

[stormriderkaos]

So funny... your next video should be on "The Crazy Economics of Rollo Shipping"

[sunalwaysshinesonTVs]

Fun fact; the pricing system embodies by the UPU was the basis of Charles Ponzi's scheme. He sought to profit from the differing costs for stamps.

[Parasprites]

amazon has already become temu/wish/ali resellers except they mark it up 10x and add a silly brand name to it

[bmxzpqz]

Wish and Temu, one of billions of reasons why we all use adblock.

[Bonsaidownunder]

Got TEMU'd in the ads... classic. 😂

[brenyounnnn]

labor exploitation and underpaying/overworking employees is also a part of those irresistibly low product prices (just a part that people dont generally enjoy talking about)

[StoneGames]

"Disrupting tech startup"
"Poor unit economics"
"Cherry picked numbers"
"Pump and dump IPO"
Hmm.... now how could we have possibly seen this coming???

[bascal]

And then, your next video you do an ad for Temu after calling their stuff junk. I’m dead 😂

[gumerzambrano]

I didn't know Temu or shein existed until I started to get bombarded with annoying ads. Blocked them everywhere

[catmansion]

"In business, we're compensated for the value we create."
... unless you're subsidized.

[nothingnothing]

I don't mind aliexpress, but I also go on there for certain niche goods like gameboy cartridge organizers or handheld console shells. They're inexpensive goods that I can only really find there. Amazon can sell them too, but it's often the same item marked up 10x higher, which is a waste of money.

[horrorhotel]

I am a loyal and repeat aliexpress customer.

But that is because I use the platform to access specialized goods in the deep vacuum, distillation and electrical engineering industries, which the platform is extremely competitive in in terms of quality and price.

It is a great platform for prototyping produ ts you later intend to sell or manufacture at scale, since you already have a working relationship with the manufacturer when it is finally time to establish the larger supply chains.

While cheap chinese junk is certainly subsidizing aliexpress margins, I think the primary purpise of that platform is as a way to capture more customers for their core business of alibaba