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Why Wix's Business Model is so successful?

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Wix’s Company Overview


Wix.com Ltd. is a leading cloud-based development platform with millions of users worldwide. Established in 2006, the company is headquartered in Tel Aviv, Israel. Wix empowers businesses of all sizes to create a robust and professional online presence using its intuitive website builder and a wide variety of integrated business solutions. The platform provides an array of design capabilities, including customizable templates, drag-and-drop features, and advanced design elements, such as animation and video backgrounds. Wix also offers comprehensive tools for marketing, SEO, and analytics, making it a one-stop-shop for businesses looking to establish or enhance their digital footprint.

Wix operates on a freemium business model. This means that while users can create and publish websites for free, they have the option to upgrade to premium plans for access to additional features, services, and customer support. Premium plans include various levels of storage, bandwidth, and additional tools such as Wix's logo maker and SEO wizard. The company also earns revenue through its App Market, where users can purchase third-party applications to enhance their websites. Furthermore, Wix provides a range of business solutions, including Wix Stores for eCommerce, Wix Restaurants for online food ordering, and Wix Bookings for appointment scheduling, each of which contributes to the company's revenue.

https://www.wix.com/

Headquater: Tel Aviv, Israel, Israel

Foundations date: 2006

Company Type: Private

Sector: Technology

Category: Internet

Digital Maturity: Beginner


Wix’s Related Competitors



Wix’s Business Model Canvas


Wix’s Key Partners
  • Wix App Market
  • Wix Arena
  • Wix Lounge
  • Google
  • Facebook
  • Microsoft
  • Shutterstock
  • Fotolia
  • Bigstock
  • IStockphoto
  • Wix IPO raised $127m
  • 500 Startups
  • Bessemer Venture Partners
  • Mangrove Capital Partners and others
Wix’s Key Activities
  • Marketing
  • Product development
  • Design
  • IT architecture
  • Quality control
  • Customer Support
  • Community management
  • Content creation
  • Billing
  • Legal
Wix’s Key Resources
  • Wix's platform is known for its simplicity
  • It caters to users who do not have coding knowledge or expertise
  • Wix provides an online platform to build websites
  • It provides customizable webpage templates and an intuitive drag and drop HTML5 web site builder
  • Wix offers integration with third-party tools and applications like Google Analytics
  • Wix has an app market
  • Wix.com is a leading cloud-based web development platform with over 52 million registered users worldwide
  • Wix has 40.000 new users joining every day
  • Wix.com was founded in 2006 in Tel Aviv and raised $40 million in a 3rd funding round in June 2011
  • Wix is a freemium product
  • Wix is built on a freemium business model meaning that it earns its revenues through premium upgrades
  • Wix is a public company that trades on the NASDAQ stock exchange under the ticker symbol WIX
Wix’s Value Propositions
  • Wix.com is a leading cloud-based web development platform with over 100 million registered users worldwide
  • Wix offers cutting-edge web technology that enables users to design
  • Manage and host high-quality websites using drag and drop tools
  • Wix offers hundreds of designer-made templates
  • Wix Artificial Design Intelligence (ADI)
  • is the first-ever artificial intelligence that designs a stunning site for you!
  • Wix Code allows you to add your own advanced functionality to your Wix site
Wix’s Customer Relationships
  • Self-service
  • Automated
  • Co-Creation
  • Community
  • Collaboration
  • Word-of-mouth
  • Help Center
  • Wix Arena
  • Wix Lounge
  • WixEd
  • Wix Blog
  • Wix Answers
Wix’s Customer Segments
  • Massive
  • Bloggers
  • Small businesses
  • Artists
  • Entrepreneurs
  • Photographers
  • Restaurants
  • Hotels and others
Wix’s Channels
  • Word of mouth
  • Website
  • Blog
  • Social Media
  • Wix Arena
  • Wix Events
  • Wix music
  • Wix Hotels
  • Wix Restaurants
  • Wix Bookings
  • Wix Photography
  • Wix Video
  • Wix App market
  • Wix Lounge
  • WixHive API
  • WixEd
  • Wix Answers
  • Wix Code
  • Wix Payments
  • Wix ShoutOut
  • Wix ADI
  • Wix App
Wix’s Cost Structure
  • Marketing
  • R&D
  • Platform maintenance
  • IT infrastructure
  • Software development
  • Customer service
  • Wages
  • Taxes
  • Legal
Wix’s Revenue Streams
  • Premium Plans (eCommerce, Connect Domain, Combo, Unlimited, VIP, and Business Basic)
  • Additional Services (Domain hosting, Mailboxes, Marketing tools, and Applications)

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Wix’s Revenue Model


Wix makes money by combining different business models. Below, you will find the list of the different monetization strategies identified for this company:

  • Freemium
  • Ecosystem
  • Trialware
  • Subscription
  • Software as a Service (SaaS)
  • Infrastructure as a Service (IaaS)
  • Add-on
  • Razor and blade
  • User design
  • Bundling
  • Auction
  • White label
  • Reseller
  • Cross-selling
  • eCommerce
  • Online marketplace
  • On-demand economy
  • Long tail
  • Digital
  • Knowledge and time
  • Solution provider
  • Affiliation
  • Referral
  • Remainder retail
  • Sponsorship
  • Cross-subsidiary
  • Archetypes of business model design
  • Decomposition
  • Selling of branded merchandise
  • Ingredient branding
  • Codifying a distinctive service capability
  • Self-service
  • Customer relationship
Analytics


Market Overview
  • Patterns
  • Sectors
  • Categories
  • Companies
  • Right click on the nodes to explore

Wix’s Case Study


Wix's CASE STUDY

At the intersection of innovation and accessibility lies Wix.com, Ltd., our subject of exploration in this case study. Established in 2006, Wix has evolved into a leading cloud-based development platform, empowering millions of users worldwide to craft aesthetically pleasing and functionally robust online presences. As experts in business strategy, we will delve into what makes Wix's business model unique, its strategic maneuvers, and the outcomes thereof, all while narrating the journey in a compelling storytelling format, inspired by the Harvard Business Review style.

The Genesis of Wix: Transforming the Web Development Landscape

In 2006, three Israeli entrepreneurs—Avishai Abrahami, Nadav Abrahami, and Giora Kaplan—noticed a significant gap in the web development market. Most small businesses lacked the technical expertise and financial resources to create sophisticated websites. What Wix offered was revolutionary: an accessible, drag-and-drop website builder that democratized web design. This simple yet powerful idea marked the birth of Wix, headquartered in Tel Aviv, Israel. Today, Wix has over 100 million registered users, with around 40,000 new sign-ups daily (Wix.com, 2023). This rapid growth can be attributed to its ingenious business model and comprehensive suite of offerings that cater to various customer needs—functionality, aesthetics, convenience, and cost-effectiveness.

Breaking Down the Freemium and Freemium Plus Model

The freemium business model has been the cornerstone of Wix's strategy. Users can create and publish websites for free but have the option to upgrade to premium plans for added features and services. This model ensures a large user base, which is essential for network effects and scaling. Premium plans contribute significantly to the company's revenue stream, ranging from Connect Domain to VIP packages. According to Wix's Q2 2023 financial results, premium subscriptions accounted for approximately 85% of their $528 million in annual revenue (Wix.com, 2023). However, it's not just about the revenue. The premium offerings ensure engaged users who are more likely to appreciate the full extent of Wix's capabilities.

Value Proposition: More Than Just a Website Builder

Wix isn’t merely a platform to create websites; it's an ecosystem designed for businesses to flourish. From the Wix App Market, presenting a plethora of third-party applications, to specialized offerings like Wix Stores for eCommerce, Wix Restaurants for online food ordering, and Wix Bookings for scheduling appointments—the platform's extensiveness is unparalleled. What sets Wix apart is its focus on enhancing user experiences through advanced features. Wix Artificial Design Intelligence (ADI) is a prime example, making it possible for users with no design skills to create professional-looking websites effortlessly. Then there’s Wix Code, which allows users to add custom functionalities to their websites—a feature that appeals to more advanced users (Wix.com, 2023).

Marketing and Community: The Heartbeat of User Engagement

Wix's marketing strategy is a blend of digital and traditional methods, leveraging social media, a blog, and the Wix Arena for community engagement. According to a 2022 study by SimilarWeb, organic search accounts for nearly 50% of Wix’s web traffic, while another 30% comes from direct traffic. The impact of word-of-mouth marketing cannot be understated here, accounting for a tangible part of Wix’s organic growth (SimilarWeb, 2022). Moreover, Wix fosters community through initiatives like Wix Lounge and Wix Arena, which are designed to help users collaborate, co-create, and find inspiration. This not only boosts user retention but also strengthens the Wix brand in the long run.

Customer-Centric Innovations

Wix's product development is inherently customer-centric. A great example of this is their integration with third-party tools and applications like Google Analytics. Such integrations make it easier for users to enhance their websites without needing to juggle multiple platforms. Feedback loops are integral to Wix’s operations. Multiple channels, including Help Centers, community forums, and direct customer support, are employed to gather user feedback. This data is then funneled into continuous product improvement, ensuring that Wix evolves in line with customer needs.

Data-Driven Decisions and Future Directions

Wix’s strategy is heavily data-driven, leveraging analytics to make informed decisions about product improvements and marketing tactics. For example, the decision to introduce Wix ADI was based on extensive user data showing that many people felt overwhelmed by traditional web design processes. Looking ahead, Wix aims to increase its foothold in eCommerce, an arena projected to keep growing at an unprecedented rate. According to Statista, global eCommerce sales are expected to hit $6.38 trillion by 2024 (Statista, 2023). With powerful tools in place, Wix is well-positioned to capture a substantial share of this market.

Lessons from the Wix Success Story

As we conclude our exploration, several key takeaways emerge from the Wix case study: 1. Simplification and Accessibility: By making web development accessible to everyone, Wix created a large, loyal user base, demonstrating the power of democratization in technology. 2. Freemium Model: Offering a free service with compelling premium upgrades has proven to be an effective strategy for user acquisition and revenue generation. 3. Ecosystem Approach: By not just being a tool but an entire ecosystem of integrated solutions, Wix maximizes user stickiness and satisfaction. 4. Data-Driven Innovation: Continuous feedback loops and analytics help ensure that the platform evolves in line with user needs and technological advancements. In essence, Wix exemplifies how integrating innovative technology with customer-centric strategies can lead to remarkable success. As the digital landscape continues to evolve, Wix’s journey offers invaluable insights for businesses aiming to harness the power of the internet for growth and impact.


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