This year’s Black Friday sales may have disappointed a number of US retailers but for online marketplace Temu, November was another banner month.
Sales on the platform that’s backed by Chinese heavyweight PDD Holdings Inc. jumped 29 percent from a month ago to a new record, according to data from Bloomberg Second Measure, which analyses consumers’ card transactions, extending Temu’s lead over fast-fashion rival Shein.
Temu’s US transactions first topped Shein’s in May, when it beat Shein by about 20 percent. It’s extended that lead every month since, in November recording almost triple Shein’s observed sales in the country.
Temu’s explosive growth comes at a time when most American shoppers are tightening their belts, a worrisome sign for the US economy, which depends heavily on consumption. A group of retail brands that cater to the upper middle class — including Apple, Coach and Nordstrom — saw their biggest sales drop in two years in the three months ahead of the all-important holiday shopping season.
Down the other end of the spectrum however, discounters such as Walmart Inc. and TJX Cos Inc., the parent company of T.J. Maxx and Marshalls, had a good Black Friday. Even Amazon.com Inc., which tends to generate more spending in the immediate run-up to the Christmas holiday, boosted its Black Friday haul by 12 percent from a year ago.
With Temu, PDD is replicating the formula of low prices and a vibrant social media presence that’s made its Pinduoduo one of the biggest e-commerce platforms in China. Rapid overseas growth contributed to a much stronger-than-anticipated September quarter for PDD, which reported a 47 percent increase in net income off sales of 68.8 billion yuan ($9.6 billion).
While often lumped together — Shein and Temu both rely on extensive supply chain networks in China and while Shein is headquartered in Singapore, much of its operations are on the mainland — the two firms do have quite significant differences.
Shein operates and sells mostly under its own brand and specialises in cheap fashion, while Temu acts as an intermediary that lets consumers buy anything from jeans to knives and headphones directly from suppliers. Shein, which according to people familiar with the matter expects net income to reach $2.5 billion this year, has increasingly been moving in that direction too.
Shein is also said to be planning a US initial public offering, hoping for a valuation of as much as $90 billion.
Temu is meanwhile in talks to buy another ad spot at next year’s Super Bowl following a splashy debut this year that introduced its youth-oriented shopping service to millions of American consumers.
By Bloomberg News
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