Shein, one of the biggest fashion companies in the world, is reportedly facing a challenge from one of his homeland’s upstarts. According to a report in Bloomberg, Temu, a shopping platform owned by Chinese e-commerce heavyweight Pinduoduo Holdings Inc, last month set a lofty sales target for its North American business: report at least a single day of gross merchandise value that exceeds Shein’s between now and that September 1 to mark the anniversary of its entry into the US market. The report quotes people familiar with the matter who asked not to be named because they are not authorized to speak publicly.
It’s said to be the first step in Temu’s broader plans to dominate the online shopping landscape. PDD, which has successfully penetrated the less-covered, lower-end segments of a Chinese market dominated by Alibaba Group Holding Ltd and JD.com Inc, is now hoping the fledgling app will fuel a longer-term overseas business.
Reportedly, Temu sees Shein as his biggest rival in the short term and aims to surpass his dominance in the next few years. However, in the long term, Temu aims to take on global giants like Amazon.com and eBay Inc.
Temu is already growing rapidly. The app has been the most downloaded app in Apple’s US app store for most of the past few months and continues to rank highly as one of the top free apps on Google Play as of December 29, 2022. The company, as per the Bloomberg report, achieved approximately $500 million in GMV in the United States in its first five months of operation. In January alone, sales were nearly $200 million, the data shows. The report quotes data analysis company YipitData. Temu launched in February this year in Canada, its second largest market.
Shein vs. Temu: The Numbers
According to a report in TechCrunch citing Sensor Tower estimates, Temu has garnered a total of 19 million lifetime installs on the App Store and Google Play, with more than 18 million coming from the United States. In October, Temu averaged about 43,000 daily installs in the U.S., the company said, while Shein averaged about 62,000 installs. In November, Temu’s average daily installs rose to 185,000 while Shein’s rose to 70,000, and last month Temu averaged 187,000 installs while Shein saw about 62,000.
According to YipitData, Shein dominates the US fast fashion market, far outperforming its competitors Zara and H&M. The Financial Times reported last month that Shein forecast global GMV to grow to $80.6 billion in 2025, up 174% year over year. While both companies are synonymous with cheap, readily available products, Temu operates more like a marketplace than a self-managed brand like Shein. Temu doesn’t handle design and production, instead hiring suppliers to offer a list of products that Temu chooses from and then allowing a store to open on its platform. After the sellers send the products to Temu’s warehouses in China, the company takes care of the delivery, marketing and promotion, and after-sales service.
