How to compete with Temu and Shein
Chinese shopping apps are here to stay, and retailers need a strategy to maintain market share.
Chinese shopping apps that primarily sell low-cost goods are increasingly in demand by U.S. consumers, with Salesforce forecasting that one-in-five (21%) purchases this holiday season will be made using them. The two most popular are Shein and Temu, as evidenced by recent analysis from Statista and App Magic indicating the Temu app had nearly 80% more downloads than the Amazon app in 2023.
No matter what products you sell or channels you operate in, you are most likely competing with Temu and Shein for share of consumer attention and wallet. Following are a few examples of strategies retailers are currently using to fend off this new, rapidly growing e-commerce challenge.
Sincere flattery
Amazon and Walmart are both responding to the emergence of Temu and Shein by developing their own offerings that link U.S. consumers directly to Chinese sellers of value-priced items.
Media reports indicate that in a June meeting with select sellers of Chinese products Amazon said it will launch a discount storefront featuring their merchandise.
Products will be directly shipped to U.S. consumers from warehouses in China with a target delivery date of nine to 11 days from purchase. The assortment will feature unbranded items across product categories including apparel, consumer electronics and home goods. Many items will feature prices of $20 or lower.
This business model would enable Chinese sellers to avoid using the hosted Fulfillment by Amazon (FBA) fulfillment network to ship products to U.S. consumers.
[READ MORE: Amazon reportedly preparing to directly compete with Temu & Shein]
Meanwhile, Walmart recently updated its Walmart Cross Border ocean shipping solution to provide seaborne transportation from select ports of loading in China to hosted Walmart Fulfillment Services (WFS) facilities in the U.S.
To use the cross-border solution, which offers a port-to-door import service, sellers must be a WFS seller that sources or manufactures goods in China, ships their goods from select Chinese ports, and ship enough inbound inventory to fill a full shipping container.
Eligible sellers can then submit their information for review on the cross-border imports page in the Walmart seller center. After an enrollment is submitted, reviewed and approved, sellers can begin booking inbound shipments, selecting shipments and then sending inventory.
The apps have it
One of the keys to the success of Chinese shopping apps with U.S. consumers is that they are mobile-first (or mobile-only) digital storefronts specifically designed for shopping via mobile device.
M-commerce is becoming the preferred method for browsing and buying goods, with Adobe predicting over 50% of online 2024 holiday sales will be transacted via mobile device.
Effectively competing with Temu and Shein requires participating in the arena where the competition takes place. Without a modern, user-friendly app with high-quality images and intuitive navigation, browsing and purchasing controls, your efforts to maintain market share will be doomed before they even begin.
Not every retailer can realistically provide the type of direct-to-consumer connection with Chinese sellers that Tier I leaders like Amazon and Walmart are able to. But every retailer can develop a high-quality app. In many cases, newer startups may possess an edge as they have less legacy infrastructure to integrate with and won’t have to upgrade or replace an existing out-of-date app.
Even a retailer that has little in-house expertise can quicky and effectively develop a high-quality app with help from a member of the network of numerous consultants and development studios that has sprung up in recent years. It won’t be cheap, but worthwhile endeavors rarely are.
Be a social butterfly
Finally, Temu, Shein and other Chinese shopping apps are especially popular with highly coveted Gen Z shoppers. A recent Omnisend survey showed that almost three-quarters of Gen Z respondents had shopped with one or more of them in the past year, and one-quarter use a Chinese shopping app at least once a week.
To prevent this crucial shopper cohort from deserting you for the luster of Temu and Shein, meet them where they are. Namely, social media. Recruit influencers to both promote your brand and help curate your merchandise assortments. Incentivize customers to display your wares in haul videos.
Other ways to get social include gamified contests that reward shoppers for doing things like posting photos with your hashtag, joining your loyalty program or even making purchases on your app. The competition is here, are you ready to join?
