How Chinese shopping sites 'Shein' and 'Temu' have come close to rivaling Amazon
by
Amazon is the largest retailer in the United States and is one of the most influential economic and cultural forces in the world. It has been reported that Chinese e-commerce companies Shein and Temu are growing in popularity without Silicon Valley realizing it.
How Shein and Temu Snuck Up on Amazon - by Louise Matsakis
https://www.bigtechnology.com/p/how-shein-and-temu-snuck-up-on-amazon
Shein is a Chinese e-commerce site that specializes in low-cost women's fashion, while Temu is an e-commerce site that offers affordable Chinese-made interior and home goods.
According to Louise Matusakis, a freelance journalist who specializes in e-commerce and China, Temu had 47 million monthly active users in the United States in April 2024, and Shein had 29 million, which combined exceeds Amazon's 66 million. Amazon says that access to its platform is on the rise, but according to market research companies, the number is down from 70 million in September 2022 when Temu launched.
By
Not only the number of accesses but also revenues have been steadily increasing, with Shein claiming that its revenue in 2023 exceeded approximately $45 billion (approximately 7 trillion yen), and Temu's parent company PDD Holdings announced that its revenue in the first quarter of 2024 increased by 140%.
However, Silicon Valley's big companies were unaware of the rise of Shein and Temu, and the two companies were largely off the radar for some time after they landed in the United States.
The U.S. mail-order industry was wary of Chinese companies because Shein and Temu were not releasing much information, and because they 'appealed to a constituency that was overlooked by the male-dominated venture capital and tech industries,' Matsusakis said.
According to one report, the average Shein user is a woman in her early 30s, and the majority of Temu users are also women.
By Paul Chin
In addition, Colin Huang, founder of PDD Holdings, said in a 2018 interview that he wanted to appeal not only to wealthy urban residents, but also to people living outside the Beijing Fifth Ring Road , that is, the middle- and low-income earners living in the suburbs.
To attract target audiences to their sites, Shein and Temu have invested huge budgets in digital advertising. According to a study by The Wall Street Journal, Temu spent nearly $2 billion (about 310 billion yen) on Instagram and Facebook advertising alone in 2023.
Perhaps reflecting these figures, Meta reported in its 2023 performance report that its total revenue from China nearly doubled year-on-year, while revenue from the United States grew by less than 6%.
In addition to aggressive marketing, Shein and Temu also attract new customers through promotions that offer big discounts or free products for referring friends and family. These promotions are flashy, for better or worse, and Matsusakis, who is familiar with Chinese e-commerce sites, says the most common question he is asked by his acquaintances is, 'Is this site really legit?'
Commenting on the experience of using Chinese e-commerce sites, which are showing incredible growth, Matsusakis said, 'Browsing on Shein or Temu feels more like being in an arcade or casino than a shopping mall, and both companies have designed their platforms to maximise metrics such as time on site. In other words, they see it as a form of entertainment rather than a tool to avoid the hassle of visiting a physical store.'
Related Posts:
in Web Service, Posted by log1l_ks