Another battle with SHEIN? TEMU to launch new site

Another battle with SHEIN? TEMU to launch new site

In 2022, Pinduoduo launched the cross-border e-commerce platform TEMU in the United States. A week later, TEMU ranked 14th among U.S. shopping apps, and two weeks later, it surpassed Amazon and SHEIN, attracting a large number of sellers to settle in while also gaining a firm foothold in the United States. In 2023, Pinduoduo seems to be preparing to enter more overseas markets, and will soon launch the TEMU Canadian site. TEMU has won two cities in North America, with remarkable results, but the competition with SHEIN is also intensifying.

 

To further expand its business, TEMU may launch a Canadian site in the first quarter of 2023

 

Earlier, some media reported that after TEMU landed in the United States, it would be launched in Africa, Europe and other countries in the future. At that time, industry insiders believed that TEMU would enter the African market next, but recent news has shown that TEMU’s next stop is Canada.

 

In January, many merchants reported that they had received a notice from the TEMU investment manager stating that TEMU had started testing the Canadian site and was expected to officially launch the TEMU Canadian site as early as the first quarter of 2023. With TEMU being such a success, many sellers said they wanted to wait until it was launched to give it a try.

 

TEMU has also provided a series of preferential policies for new sites . For example, the minimum inventory threshold for advertising items is 50 pieces; all new products are given 7-day traffic support, flash sale support and traffic support; for stores with more than 50 or even 100 products per store, the official will provide additional traffic support. It seems that TEMU's Canadian site will continue its strategy after its initial launch as the US site.

 

According to the investment manager, in the background of TEMU, the relevant data of the Canadian market and the United States have been connected. All the products that have been listed in the US site will be synchronized to the Canadian site . Sellers do not need to re-list the goods in the Canadian market, which reduces many steps. However, due to the differences between the two markets, TEMU recommends that sellers should consider the consumption situation of the local market when listing new products in Canada, and the products should mainly be consumer electronics, clothing and other categories.

 

 

In addition, according to sellers’ feedback, not all sellers have received notifications about the launch of TEMU’s Canadian site. It can be speculated that the current internal testing of TEMU’s Canadian site is only for some sellers on the US site. It may be open to more sellers after the official launch, but there may also be restrictions. As early as two months ago, there was news that TEMU was preparing to launch the Canadian site in the first half of 2023, but the relevant threshold would also be raised.

 

Currently, although TEMU has allowed registration with mobile phone numbers outside the United States, the delivery address can only be selected within the United States, which means that users in Canada still cannot shop on TEMU . A seller once opened the website temu.ca that is suspected to be a Canadian site , but the website still jumped to TEMU's US site.

 

However, since the Canadian site has entered the internal testing phase, according to Pinduoduo's inertia, the launch time is not far away, and we can also look forward to it. TEMU's launch on the Canadian site is a foregone conclusion, so why did it choose Canada as the first choice for testing the waters?

 

TEMU is trying its hand in Canada. What is it seeing?

 

Canada has a highly developed economy. Its GDP ranked ninth in the world in 2020, with a per capita GDP of $43,000. The local Internet penetration rate is close to 100%, and the online shopping rate of the people is as high as 89%. They are very receptive to cross-border shopping. Nearly 70% of Canadian consumers like to shop overseas, and China and the United States are the two countries where they often shop online.

 

Taking into account the geographical location, economic level and consumption habits of the United States and Canada, many sellers believe that many dimensions of the two are relatively similar, which makes it easier for the platform to take root locally and transplant the successful strategies in the US market to Canada. That is why TEMU chose to test the waters in Canada.

 

E-commerce in the Canadian market is developing rapidly. Since 2020, Canada's e-commerce consumption has increased year by year. Even after offline retail gradually recovered in 2021, Canada's e-commerce market still maintained a 26% growth, 4% higher than the growth rate of the United States during the same period. Data from industry insiders show that from 2021 to 2025, Canada's e-commerce industry will continue to maintain an annual growth rate of about 15%, which is 10% higher than the global industry average growth rate during the same period.

 

 

On the other hand, with inflation, more and more Canadians choose to shop online, and they prefer to buy products with a higher cost-effectiveness online. Fast fashion is the most popular category for Canadian online shoppers, accounting for US$7.07 billion in market sales, followed by electronic products and books. For sellers selling winter products, Canada's long winter provides fertile soil for the sale of their products, such as skis, ski suits, and ski socks, which are hot-selling products locally.

 

Of course, TMEU’s purpose of going to Canada goes far beyond this.

 

Is TEMU’s expansion into Canada intended to compete with SHEIN for the market?

 

In the Canadian market, SHEIN has already taken root. With relatively low-priced apparel products, SHEIN has successfully squeezed into the top six e-commerce platforms in Canada in terms of sales. TEMU is also a platform known for its high cost-effectiveness. When it launched its Canadian site, it also recommended sellers to launch new products in categories such as consumer electronics and apparel, which is consistent with SHEIN's main categories.

 

"The war between TEMU and SHEIN has already begun in the United States, and Canada should be their next battlefield," said one seller.

 

In fact, this statement is not without reason. Since TMEU went online in 2022, it has inevitably been compared with SHEIN by industry insiders. From merchant entry to supply chain to marketing strategy, the competitive relationship between the two has naturally formed.

 

With the marketing model of social fission and low-price subsidies, TMEU has exceeded 1.5 million US dollars in daily average GMV in more than a month since its launch. The number of merchants settled in TMEU is nearly 30,000, with 300,000 to 400,000 SKUs, covering 24 first-level categories. Some sellers have even delivered thousands of orders a day. TEMU topped the US IOS free download list two months after its launch and continued to dominate the list. During the Black Friday and Cyber ​​Monday period, TEMU even offered crazy discounts, far exceeding SHEIN and Amazon. For a time, TMEU was in the limelight.

 

TMEU soared in 2022, but SHEIN entered a period of pain that year. Negative news such as internal copyright and environmental governance were plaguing the market, and platforms such as TEMU were outflanking the market at low prices. Many shareholders sold their shares, and its market value shrank by US$36 billion.

 

Industry insiders generally linked this incident to TEMU. In their view, the period from TEMU's preparation to its launch overseas was also the time when SHEIN was cold in the capital market. Investors had higher expectations for TEMU, believing that TEMU could shake SHEIN's position, so they cashed out their equity at a high level in advance, causing SHEIN to suffer a heavy blow.

 

The launch of TEMU in Canada is also considered by many in the industry as a competition between the two, and they are also watching the market competition between TEMU and SHEIN.


Temu

SHEIN

Canada

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