Are overseas shipping apps stealing share from off-pricers in the U.S.?

Discussion
Source: Wish.com
Jan 10, 2018

Overseas shipping apps such as Wish and SheIn offer unique products at rock bottom prices. Although both apps specialize in cheaply-manufactured versions of popular brand name products, their popularity has skyrocketed in the past two years.

Market analysts are already predicting that Wish is going to give retailers a run for their money. In fact, Forbes reports that e-commerce app Wish, which specializes in shipping products manufactured in China, already has a pre-market valuation of over $8.5 billion — meaning it’s already worth as much as Macy’s, J.C. Penney and Sears combined.

The rival shipping platform site, SheIn, boasts “over 200 new arrivals daily.” SheIn ships to 80 countries around the world from a batch of global warehouses, according to its website. However, Refinery 29 reports that SheIn is in actuality based in China.

Wish hosts many products sold for $0 and up while SheIn’s prices start at $1.99. This begs the question of how these overseas shippers are making margins when they’re ponying up to ship these “free” or nearly free products to U.S. customers. In the case of Wish, the answer is hidden within the recesses of product review sites and online discussions.

Mobile consumers have stated concerns that the “free” and low-priced items on the Wish app tend to have significantly higher shipping prices. In fact, by following the same product and shipping prices for a few weeks one may notice that, no matter what the list price may be at a given time, the customer ends up paying the exact same amount between the combination of the ticket price and shipping costs.

Furthermore, since Wish and SheIn specialize in polyester knockoffs of popular styles, they often swipe product images from the websites of fashion blogs or photography sites. As a result, consumers regularly find they receive an entirely different product than the one they paid for on the app. Yet despite all the flaws, Americans can’t seem to resist the cheap fast-fashion that these apps provide.

Whether apps such as Wish and SheIn will bring about the decline of American off-pricers is up for debate. CNBC recently reported that off-price sector sales from retail darlings TJX and Burlington are beginning to decline with some analysts questioning the discount sector’s future. Wells Fargo analyst Ike Boruchow, per CNBC, told clients that “TJX, Ross Stores and Burlington could see lower sales in the fourth quarter and into fiscal 2018.”

DISCUSSION QUESTIONS: What short- and long-term impact on the American off-price retail market do you see coming from overseas shopping apps such as Wish and SheIn? Will product quality discrepancies and lack of shipping price transparency undermine the popularity of these apps?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Today's cost-conscious consumer is also very quality-conscious."
"I do not believe that these overseas shopping apps will pose any significant threat to the thriving off-price retail sector."
"Guess what? Cheap stuff sells. That’s true for virtually any product or service category, except maybe for brain surgery. "

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8 Comments on "Are overseas shipping apps stealing share from off-pricers in the U.S.?"


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Brandon Rael
BrainTrust

The off-price market is in no danger of diminishing, as the business model is built squarely on the “treasure hunt” of going to the physical store and finding a diamond in the rough. The core off-price customer is not necessarily shopping online or on mobile apps, rather they are going to Ross Stores, TJX and others several times a week. I do not believe that these overseas shopping apps will pose any significant threat to the thriving off-price retail sector.

Kenneth Lucas
Guest
4 years 4 months ago

I’m in the import business and I use the Wish app for my own shopping. It’s scary how low they can get some of their pricing. Of course it is buyer beware on many items, but they do have responsive customer service on any shipping or quality issues.

Gene Detroyer
BrainTrust

It is not a matter of “stealing.” If the sellers continue to deliver merchandise below expectations, they will not be around long. However, if they fix it, and they do need to fix and meet the expectations, technologies will make them even more successful than they are today. Both technology and shipping will continue to become more efficient.

Lee Kent
Guest

Today’s cost-conscious consumer is also very quality-conscious. While they may enjoy filling in with some of these low quality goods, I doubt the market will be threatened too much. The American market can be very discerning. For my 2 cents.

Nikki Baird
BrainTrust
Nikki Baird
VP of Strategy, Aptos
4 years 4 months ago
I’ve tried Wish for clothing and have been sorely disappointed. The sizing is awful, the quality is awful and it takes forever to ship. Not even my very cost-conscious teen daughter is enamored enough with the prices to overlook how much the fashion she receives does NOT look like the image she saw when she bought it (things like, the arm holes are attached in weird places). Now, what was interesting about the shipping, though, is that Wish gave me global updates, so I was communicated with frequently about where my stuff was. That did give me greater peace of mind that they hadn’t forgotten about me, which alone is better than a lot of domestically-located retailers, and I can see that appeal. In the meantime, my son is busy assembling the equivalent of a RadioShack in his bedroom, as he gets into Arduino and Raspberry Pi (and hacking the home network, but that’s another story), and he has found Wish to be VERY interesting for cheap components like capacitors or LED lights. We have… Read more »
Ralph Jacobson
Guest

Guess what? Cheap stuff sells. That’s true for virtually any product or service category, except maybe for brain surgery. Those that thrive in the longer term will shake out from the competition based on brand loyalty and repeat purchases. Pretty straightforward here.

Cathy Hotka
BrainTrust

SheIn is a terrific option for women who stick to smaller sizes. Customers should be aware that shipping will take longer than usually, and products are on the petite side. That said, a $12 dress is definitely worth the uncertainty.

Min-Jee Hwang
Guest

I don’t see these apps taking over off-price retail. I agree with Brandon in terms of the “treasure hunt” allure of off-price retailers. Many reports have come out saying shoppers don’t go Amazon for product discovery, even though it takes up so much of the retail market. I see these apps as being faced with a similar issue. Low prices can be alluring, but I’d argue that shoppers would be more comfortable paying more for items from a trusted brand. Being able to walk out with a product or at least not have to wait weeks for delivery are distinct advantages for off-price retailers.

wpDiscuz
Braintrust
"Today's cost-conscious consumer is also very quality-conscious."
"I do not believe that these overseas shopping apps will pose any significant threat to the thriving off-price retail sector."
"Guess what? Cheap stuff sells. That’s true for virtually any product or service category, except maybe for brain surgery. "

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