Shoppers Gonna Shop - Shein and Temu Could Worry Amazon
We’re not the first to consider the impact that Chinese e-commerce players Shein and Temu might have on Amazon’s US business. We do have data about how many Amazon customers shop at these competitors.
While Shein and Temu compete and litigate with each other, both are focused on gaining customers in the critical US market. Shein was founded 15 years ago as a fast-fashion retailer and is now the largest fashion retailer in the world. Their growth strategy now includes opening distribution facilities in the US and building an online marketplace, not unlike Amazon third-party sellers. Temu launched in the US in 2023 and today direct ships almost all orders from China. Temu sells fashion and just about everything else one would find at a Target or Walmart, minus groceries.
Both Shein and Temu favor low prices over high quality and service. Their proximity to manufacturing and speedy product development allows them to be fashion leaders. Their low prices make customers tolerate slower shipping, certainly compared to Amazon’s optimized US delivery infrastructure.
Should Amazon be scared? Even though Shein and Temu are both recent arrivals in the US, they have made impressive inroads into the Amazon customer base. Almost one-fifth of Amazon customers report having also shopped at Shein, while over one-quarter of Amazon customers report having also shopped at Temu (Chart 1).