It wasn’t all that long ago that most people in the U.S. had never heard of Shein, much less bought something from its online store. And that’s even more so with Temu, a similar website seller that was unfamiliar to American shoppers just a few months ago.
Today the two Chinese-origin e-commerce players are massive operations competing head-to-head with each other and virtually everyone else who sells online. And now, as competitors sometimes do, they are suing each other, citing anti-trust violations, all of which remains to be seen.
Shein was started in China in 2008 under a different name but only entered the American market in 2022. It now claims to be the world’s largest fashion retailer with annual sales last year of $24 billion, far larger than any of the fast-fashion brands like Zara or H&M it is often compared to, although like those retailers it also carries home merchandise. It moved its corporate headquarters to Singapore last year for largely political reasons to stay out of the Chinese-American diplomatic wars even though it is believed it still gets the bulk of its products from China.
Shein just upped the competition too when it announced in August it was teaming up with Forever 21’s owners to partner on in-store and online initiatives, even taking ownership positions in each other. It’s a bold move that further places its future squarely in the American marketplace.
Temu is even newer than Shein, having only been founded in 2022 and while its parent company, PDD Holdings is based in China, it says it is headquartered in Boston. It was virtually unheard of in the U.S. until it ran two 30-second commercials during the 2023 Super Bowl broadcast at a reported cost of $14 million. Downloads of its app exploded and it has been reported it was the most downloaded app on the internet shortly thereafter. Its annual volume has not been released publicly.
The two e-tailers mostly work with small factories in Asia and seem to be able to ramp up production quickly for items that start selling well. Merchandise is generally low-priced although each often jumps on fashion trends quickly, faster than even the so-called fast fashion retailers.
Together, Shein and Temu are redefining the online space in ways that others have not been able to, representing legitimate threats not only to large American omnichannel retailers but also to the king of e-commerce itself, Amazon. It seems unlikely they will be able to maintain the growth levels they’ve been hitting so far but they clearly represent a new level of competition for anyone selling apparel and home merchandise.