In July, Temu entered Asia with debut releases in Japan and South Korea. Data.ai analysis shared with CNBC revealed that by staying at the top of the shopping app rankings in these countries for a sustained duration, Temu was able to surpass Shein. Temu is supported by PDD Holdings, a Chinese tech business that is listed on the Nasdaq and happens to be the holder of Chinese e-commerce platform Pinduoduo.
Temu, owned by PDD Holdings, has quickly spread its presence outside of the United States and into dozens of other countries, with Goldman Sachs expecting this trend to continue. Their October 4 report concluded that Temu is accumulating more than $1 billion in monthly transaction value. In contrast, Shein is estimated to hit $30 billion by the end of 2022, according to media reports. Data.ai discovered that despite Shein's success, Temu has become the dominant presence in shopping app rankings in Japan and South Korea.
For the period from July launch to Nov. 2, analytics data shows that Temu occupied the #1 spot in terms of daily iOS & Google Play shopping app downloads in Japan for 101 out of 124 days. In comparison, Shein was at the top of both app stores for only 17 days in the same period. Additionally, Temu achieved four million downloads in Japan in just over four months, whereas it took Shein roughly five months to reach the same level. Mercari and Amazon needed 14 and 22 months respectively to hit the four million download mark.
A similar trend can be seen in South Korea, where Temu ranked #1 by daily iOS & Google Play shopping app downloads for 65 days out of 93 days from Aug. 1 to Nov. 2, surpassing AliExpress (at 25 days). Shein, meanwhile, is among the top 5.
At the top of the South Korean shopping app market, Temu achieved 2 million downloads in a speedy 88 days, outpacing Shein and AliExpress who needed 382 and 366 days, respectively, to hit the same mark. This competition between Temu and Shein continues outside of the e-commerce domain and has even made its way to the courtroom. In December, Shein sued Temu for intellectual-property infringement and, conversely, in July, Temu accused Shein of strong-arming and coercing suppliers to enter exclusivity contracts. Nonetheless, documents now suggest that both companies have filed paperwork to withdraw their legal cases against one another.
PDD Holdings, a Nasdaq- listed Chinese tech giant, is the backer of Temu. This e-commerce platform launched in the U.S. in September 2022 and rapidly gained popularity among cost-conscious customers. In less than a few weeks, the Chinese app rose to the top of the app stores, and saw a quick expansion over countries such as Australia, New Zealand, France, Italy, Germany, the Netherlands, Spain and the U.K. The Chinese online retailer has its headquarters in Boston, Massachusetts, and concentrates on providing made-in-China items, including fashion and home products, at an economical price to overseas purchasers. Comparably, Shein is dependant on its contracted manufacturers, mainly in China, for designing, producing, and delivering its low-priced items. In July, Temu initiated its move into Asia by stepping into Japan and South Korea, followed by the Philippines on 26th August, and Malaysia on the 8th of September.
Citi analysts stated in their Aug. 29 report that the 131% year-on-year growth in PDD's transaction service revenues and 135% year-on-year growth in cost of goods sold in second quarter 2023 is strongly linked to the quick development of Temu. This platform has exploited its parent company's strengths in the domains of supply chain and marketing to expand rapidly since its debut. Bernstein analysts commented in their Sept. 15 report that PDD has dedicated a great deal of additional investment resources to create Temu. This is evidenced by its multi-million Super Bowl ad, which has firmly established Temu in the minds of numerous targeted customers. In their opinion, the rapid upsurge of Temu may be attributed to several factors, including the large-scale marketing investments, low prices and focusing on promotions, as well as the success of its referral campaigns.
Analysts predicted a growing contribution to non-U.S. transaction value from Temu due to a surge in active users and order volume. In June, the U.S. House Select Committee declared that Shein and Temu had committed a violation of import tariff law by bringing in goods to the U.S. without settling any duties or making sure the shipments abided by human rights reviews.
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