According to news from Sina Technology News in the morning of March 6, it is reported that Chinese cross-border e-commerce company Shein has spent a decade surpassing the Zara brand of European fashion retail group Inditex to become the largest fast fashion retailer in the world. However, now there is a new e-commerce "dark horse", ready to take the throne of Shein in a year's time (at least in terms of one business indicator).
Last year, pinduoduo entered North America and launched Temu, a cross-border e-commerce platform. Last month, Temu set an ambitious goal for its North American business that retail sales must exceed Shein at least one day between now and Sept. 1, according to people familiar with the matter. On September 1st, it happens to be the first anniversary of pinduoduo's entry into the US market.
Pinduoduo and Temu have great ambitions in the field of e-commerce, and the above goals are only the first step for them. According to informed sources, in Temu's view, Shein is the biggest competitor in the North American market in the short term, and in the next few years, Temu hopes to surpass Shein in terms of influence and position.
Temu sells more than just fashion, including everything from clothes to baby products. According to people familiar with the matter, Temu's ultimate goal is to challenge established e-commerce "empires" such as Amazon and eBay around the world.
Temu is growing rapidly in the US market, and Temu has been the No. 1 downloaded mobile app in the United States for the past few months.
In the first five months of operation in the United States, Temu's retail sales exceeded the $500m mark, according to YipitData, a data analysis firm. In January of this year, retail sales were close to $200 million. In February this year, Temu launched in Canada, which is also the app's second market.
Temu's competitor, Shein, is not a public company and its financial data are not made public. But there are some signs that Shein, a competitor threatened by Temu, is increasing the pace of business expansion.
According to YipitData, Shein has become the industry leader in the US fast fashion retail market, surpassing Zara and HumbampterM as the industry's biggest rivals.
It was previously reported that Shein predicted that total global sales would increase to $80.6 billion in 2025, a month-on-month growth rate of 174 per cent. The report quoted Shein management's disclosure to investors. It is reported that by 2025, the company's revenue will reach 58.5 billion US dollars, up from 22.7 billion US dollars in 2022.
So far, Temu's staff has not been assigned a target for daily sales, figures that are known only to senior managers. According to informed sources, the instructions received by employees have changed. In the past, they did everything possible to increase the number of downloads and the size of users, but now they need to increase the amount of online shopping for each consumer.
Temu did not comment on the report.
Shein's great success in the fast fashion market has attracted a number of newcomers to the market, but Temu is considered to be the most powerful competitor.
According to reports, Temu is already poaching some of Shein's employees to compete for some of each other's suppliers. In addition, Temu has a huge competitive advantage, its parent company is pinduoduo (has won 13% of China's e-commerce market share), so Temu has rich financial strength, a large number of supply chain partnerships, and operational experience.
What Temu and Shein have in common is that goods are cheap, but Shein is mainly a proprietary brand, while Temu is more like an online store. Temu does not have a product design and manufacturing team, they will choose some Chinese suppliers and invite them to set up online stores in the store.
It is reported that Chinese commodity suppliers will deliver the goods to Temu's domestic warehouse, and then Temu will be responsible for overseas transportation, marketing, promotion and after-sales service.
In Temu's view, large-scale marketing and publicity can stimulate sales. In mid-February, Temu made its debut live broadcast of the Super Bowl, buying two 30-second spots (which traditionally cost millions of dollars to produce and broadcast). In the advertisement, a fashionable consumer looks at a wide variety of fashions and dances excitedly.
In the United States, Temu has launched activities similar to those carried out by pinduoduo in China, such as discount promotions, cash returns, and free gifts to consumers who recommend friends to come and buy.
Temu's marketing strategy has had an effect. In January, Temu had more visitors than Shein. If Temu can maintain its current momentum, then the company will be added to the list of "Chinese Internet products that have been successful in the United States", which currently includes Alibaba's AliExpress and Byte Jump's short video platform TikTok.
Responsible Editor: Zheng Zhuo
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