[ad_1]
A package from Temu can be seen in front of a screen with the Temu logo. (Photo by Nikos Pekiaridis/NurPhoto via Getty Images)
Nurfoto | Nurfoto | Getty Images
Chinese discount retailer Temu dominates app stores in Japan and South Korea in its category, dethroning rival Shein after its successful expansion in Western markets.
“Temu has rapidly expanded its footprint beyond the US and into a number of international regions and we believe is now available in more than 40 countries… where we continue to see opportunities for growth in the coming quarters,” Goldman Sachs said in an October 2014 .4 report.
The investment firm estimated that Temu, owned by PDD companies, “now generates more than $1 billion in [monthly transaction value]” and expects “continued growth in the second half of 2023.”
According to media reports, competitor Shein is estimated to be on track to reach a transaction value of $30 billion by 2022.
Temu has overtaken Shein in Japan and South Korea by remaining at the top of the shopping app rankings in those locations for an extended period of time, according to data.ai analysis shared with CNBC.
Since launching in Japan on November 2, “Temu has ranked No. 1 in daily downloads of iOS and Google Play store apps in Japan for 101 days out of 124 days,” according to the app analytics and data company.
By comparison, Shein topped the two app stores in Japan for just seventeen days during the same period.
Temu was the fastest with four million downloads in Japan, which took about 121 days, compared to Shein, which took 155 days, according to data.ai. The Japanese marketplace Mercari lasted 427 days and Amazon 660 days, the data showed.
Similarly, in South Korea, Temu ranked No. 1 in daily downloads of iOS and Google Play store apps for 65 days out of the 93 days from August 1 to November 2, overtaking. Alibaba.com‘s AliExpress (25 days), while Shein is among the top 5.
Of the top shopping apps in South Korea, Temu was the fastest with 2 million downloads in about 88 days. Shein took 382 days, while AliExpress took 366 days to reach the same milestone.
The rivalry between Temu and Shein extends beyond the e-commerce space and into the courtroom. Shein sued Temu in December for intellectual property infringement, while Temu accused Shein in July of threatening and coercing manufacturers into exclusivity deals. But recent documents show that both sides have filed to end their lawsuits against each other.
The Rise of Temu
Temu is backed by Nasdaq-listed Chinese tech giant PDD Holdings, which also owns China-based e-commerce app Pinduoduo.
Temu, which launched in the US in September 2022, was PDD’s first big push abroad and quickly found success with price-conscious consumers.
In just a few weeks, the Chinese e-commerce app rose to the top of the app stores and then quickly expanded in countries such as Australia, New Zealand, France, Italy, Germany, Netherlands, Spain and the United Kingdom .
The Chinese online retailer, headquartered in Boston, Massachusetts, focuses on selling Chinese-made goods, from fashion to home products, at low prices to foreign consumers. Similarly, Shein relies on contracted manufacturers, primarily in China, to design, produce and ship its low-priced products.
Temu made his trip to Asia in July via Japan and South Korea. It then entered the Philippines on August 26 before launching in Malaysia on September 8.
“We believe that is the main reason for this [PDD’s] The 131% year-on-year growth in transaction services revenue and 135% year-on-year growth in cost of goods sold in the second quarter of 2023 was related to the rapid increase in Temu performance,” said Citi analysts in an Aug. 29 report.
The platform has expanded rapidly since launch by leveraging its parent company’s strengths in supply chain and marketing.
“A large portion of PDD’s additional investment dollars have been deployed to enable Temu,” Bernstein analysts said in a Sept. 15 report, adding that Temu’s multimillion-dollar Super Bowl ad “has strengthened Temu’s mindshare for some of its audiences .”
“We believe Temu’s rapid rise in popularity was supported by the company’s increased marketing investments, low prices and focus on promotions, as well as the success of its referral campaigns,” Berstein analysts said.
The analysts said they expect “an increase in active users and order volume” in Temu to add to non-US transaction value and “increasingly contribute to growth from here.”
In June, the US House Select Committee alleged that Shein and Temu violated tariff laws by importing goods into the US without paying duties or subjecting shipments to human rights checks.
