Shein and Temu are fast-growing online shopping platforms in the United States. Despite this, there are virtually no sellers in the United States. In the case of Amazon, Chinese sellers have been increasing their market share in the company for years. More than half of the technology multinational's sellers are based in China and the two new marketplaces are intended exclusively for Chinese sellers. Therefore, American sellers are losing market share to international ones.
Chinese dominance
On his part Shein launched its marketplace in the United States in May. According to research by Marketplace Pulse, has since added a small number of American sellers offering their products on its platform, compared to thousands in China. In addition, young direct-to-consumer brands are not yet showing interest in partnering with Shein.
Ultimately, the goal of this marketplace was to encourage American sellers to find a retailer that would otherwise have to rely on China. According to the words of Peter Pernot-Day, Shein's Chief Strategy Officer, in an episode of the Modern Retail podcast: The marketplace is part of Shein's localization strategy. “The final part of this strategy is to find suppliers who produce clothing for Shein, but also third-party suppliers who are interested in joining us and reaching our customer base in these local regions.”
On the other hand, Temu, a Chinese online shopping platform, It was released in the United States in September 2022, where the company operates out of Boston, entering a different market for the first time. Soon became the highest rated shopping app on the iOS and Android storeswith more than 5 million downloads.
Marketplace Pulse research shows its growth has reached over a hundred thousand sellers in just over a year. As with Shein, the sellers' business location is not known. However, all Temu sellers are based in China.
However, in this case, the company planned to add American sellers “Temu was unsure whether there were enough local sellers in the United States that met their needs to provide the profitable products the platform needed at this time.”reported LatePost in China in July.
Estimates put Temu's GMV at $15 billion in 2023, its first full year of operation. No other marketplace or retailer has grown so quickly. Shein's GMV is $40 billion in 2023. Shein and Temu do half of their business in the United States and the rest in dozens of other countries where they operate.