A package deal from Temu is seen in entrance of a display screen with the Temu emblem. (Photo by Nikos Pekiaridis/NurPhoto through Getty Images)
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Chinese low-cost retailer Temu is dominating app shops in Japan and South Korea in its class, dethroning rival Shein after its profitable growth in Western markets.
“Temu has rapidly expanded its footprint beyond the U.S. and into a number of international geographies and we believe is now available in 40+ countries … where we continue to see opportunities for growth in the quarters ahead,” stated Goldman Sachs in an Oct. 4 report.
The funding agency estimated that Temu, which is owned by PDD Holdings, “now generates more than $1 billion of [monthly transaction value]” and expects “continued growth into second half 2023.”
Its rival Shein was estimated to be on monitor to hit $30 billion in transaction worth in 2022, in keeping with media experiences.
Temu has overtaken Shein in Japan and South Korea by staying on the high of purchasing app rankings in these places for an extended time frame, in keeping with knowledge.ai evaluation shared with CNBC.
Since its July launch in Japan to Nov. 2, “Temu has ranked #1 by daily iOS & Google Play shopping app downloads in Japan for 101 days out of 124 days,” stated the app analytics and knowledge firm.
By comparability, Shein spent simply 17 days topping the 2 app shops in the identical interval in Japan.
Temu was the quickest to achieve 4 million downloads in Japan, taking round 121 days, in comparison with Shein which took 155 days, in keeping with knowledge.ai. Japanese market Mercari took 427 days and Amazon 660 days, the information confirmed.
Similarly, in South Korea, Temu ranked No. 1 by each day iOS & Google Play purchasing app downloads for 65 days out of 93 days from Aug. 1 to Nov. 2, overtaking Alibaba‘s AliExpress (25 days) whereas Shein ranks among the many high 5.
Among the highest purchasing apps in South Korea, Temu was the quickest to achieve 2 million downloads at round 88 days. Shein took 382 days whereas AliExpress took three hundred and sixty six days to hit the identical milestone.
Temu and Shein’s rivalry lengthen exterior the e-commerce area to the courtroom. Shein sued Temu in December over intellectual-property infringement whereas Temu accused Shein in July of threatening and forcing producers into exclusivity agreements. But latest paperwork confirmed that each events have utilized to finish their lawsuits towards one another.
Temu is backed by Nasdaq-listed Chinese tech big PDD Holdings, which additionally owns China-based e-commerce app Pinduoduo.
Launched within the U.S. in September 2022, Temu was PDD’s first main push abroad and rapidly discovered success amongst budget-conscious customers.
In only a few weeks, the Chinese ecommerce app rose to the highest of app shops and subsequently expanded quickly throughout nations equivalent to Australia, New Zealand, France, Italy, Germany, the Netherlands, Spain, and the U.Ok.
Headquartered in Boston, Massachusetts, the Chinese on-line retailer focuses on promoting made-in-China items, from style to family merchandise, at low costs to abroad customers. Similarly, Shein depends on contracted producers, principally in China, to design, produce and ship its low-priced merchandise.
Temu made its foray into Asia via Japan and South Korea in July. It then entered the Philippines on Aug. 26 earlier than launching in Malaysia on Sept. 8.
“We believe the main reason for [PDD’s] 131% year-on-year growth in transaction service revenues and 135% year-on-year growth in cost of goods sold in second quarter 2023 was related to fast ramp of Temu performance,” Citi analysts stated in a Aug. 29 report.
The platform has been increasing quickly since its launch by leveraging its guardian firm’s energy in provide chain and advertising.
“Much of PDD’s incremental investment dollars have been deployed to make Temu happen,” stated Bernstein analysts in a Sept. 15 report, including that Temu’s multi-million Super Bowl commercial “solidified Temu’s mind share for a number of its target customers.”
“We believe that Temu’s rapid rise in popularity was supported by the company’s elevated marketing investments, its low prices and focus on promotions, and to the success of its referral campaigns,” stated Berstein’s analysts.
The analysts stated they anticipate to see “an increase in the number of active users and order volume” in Temu contributing to non-U.S. transaction worth and “increasingly contributing to growth from here.”
In June, the U.S. House Select Committee alleged that Shein and Temu violated import tariff legislation by importing items into the U.S. with out paying import duties or making shipments topic to human rights opinions.