When uploading products to the Wish platform, merchants indicate their product and shipping prices. The prices shown to Wish customers, on the other hand, historically had been based on our dynamic pricing markups (total price markups).
In the second quarter of 2022, we began to phase out dynamic pricing markups for select merchants. The primary impact was an uptick in orders and customer retention, signaling success of the change. Based on this information, and to boost merchant and user engagement in our marketplace, we expanded this decision. As of July 1, 2022, dynamic pricing markups have been phased out for all merchants worldwide.
Note: VAT, a consumption tax levied on all goods sold in/to the European Union, will still be added to the merchant-set pricing, where applicable and required by law. So the total prices that customers see may still be higher than merchant-set ones, not because of dynamic pricing but because of VAT inclusion.
The end to dynamic pricing markups is a significant step towards enhancing our partnership with merchants by putting more control into merchants’ hands. With the ability to set competitive prices and elevate their top products, merchants are now better positioned to drive more sales with products that delight our customers.
As a result, merchants may see a direct increase in sales in the short term. In the long term, more attractive prices from merchants will help amplify user confidence, propel user growth and retention, and foster a more active Wish ecosystem.
Our merchants are our partners. As we look to strengthen that partnership through these recent efforts, we welcome merchant feedback to help us grow and continue to be their trusted marketplace.