Rise of China’s Temu and Singapore’s Sheinhas been exponential in the US. The e-tailers revenues have surged in the past year. Shein reportedly grew more than 40%, and is said to be on its way to surpass Zara — the world’s largest retailer. Shein has been able to trump fast-fashion incumbents Inditex’s Zara and H&M, with revenues reaching $24 billion in the first three quarters of this year, according to reports.The company’s valuation rose to $90 billion after it acquired UK-based online retailer Missguided in October.
According to a report in news agency Reuters, both Temu and Shein have been drawing millions of window shoppers to their websites this holiday season, but they reportedly far lag market leader Amazon.com where it counts. This is turning those visits into actual sales. According to Similarweb, a website data tracking firm, nine out of ten visitors to their websites were window shoppers, not buyers. Shein’s website reportedly drew 28.6 million unique monthly visitors in October, up 7.25% from a year earlier, according to Similarweb. But visits to Shein’s website that resulted in actual transactions declined to 4.1% from 4.6% a year earlier. The Shein app had 64 million monthly active users, a two-thirds increase on a year ago.
The newer Temu, which launched in the US in September 2022, is offering deals for cheap goods for the holiday shopping season. It had 42 million unique monthly visitors in October 2023, more than four times the amount a year earlier. Only 4.5% of those resulted in actual transactions. In Europe, the Temu app overtook eBay in October, hitting 51 million monthly active users across Android and Apple devices, according to data.ai.
The additional eyeballs on Shein is thanks to aggressive marketing. Shein is ramping up holiday marketing in the US and Europe as it extends its reach and products on its platform. Shein increased its ad spend 60% in the first two weeks of November compared to the same period a year earlier, according to data from marketing intelligence firm SensorTower. Its rival, Temu, doubled its ad spend within the same time frame, the data showed.
What “works” for Amazon
Amazon beat both online retailers with 56% of its 268 million unique monthly visits in October resulting in purchases, as per its data. While both Shein and Temu have been aggressive in advertising, Amazon cut its spending on advertising for the holidays in early November compared to a year ago. The etailer, however, is said to have seen more user engagement than it did in 2022, according to SensorTower. Melissa Minkow, director of retail strategy at information technology firm CI&T, told the agency that online shoppers have an “inherent comfort level” with Amazon’s expansive product categories, shipping speeds and return policies compared to Shein and Temu.
(With agency inputs)