Daily GMV exceeds $1.5 million, Temu plans to surpass SHEIN in 5 years

The news of Pinduoduo's expansion into the United States seems to have just come out not long ago, but upon closer inspection, its cross-border e-commerce platform Temu has been officially launched for two months. Recently, it was reported that it might copy its domestic strategy and launch the "cut one knife" function in the United States.

The average daily GMV exceeds 1.5 million US dollars . Is Temu planning to copy the same “cutting” in the US ?

Recently, there have been reports that Temu users can share links with friends through WhatsApp, Messenger, and Facebook and receive corresponding rewards . If this continues, it may launch a "cut one knife" feature.

After verifying from multiple sources, a relevant person told Yien.com that they had not received any relevant information .

Currently, Temu attracts new users through low prices, free shipping for new users, and discounts without thresholds for the entire site . It also encourages old users to invite new users through discounts and rewards . In addition, it also invites students to register by offering a 15% student discount .

Perhaps fearing that US regulators would expel Temu on charges of "inducing marketing" and "unfair competition" , Temu had previously stated that it would not launch the "cut one knife" function for the time being, but would instead increase transaction conversion rates by adopting the form of a content community on mobile devices.

It is reported that T emu will invest about 1 billion yuan in marketing in the first three months, focusing on acquiring customers through public domain traffic and content-based delivery .

All in all, the "Kan Yidao" on temu will probably not be launched in the near future. After all, it has just entered a new market and a big tree attracts the wind. It cannot face huge fines or fail before making huge profits.

With the arrival of Black Friday, Temu has recently launched the " Give 40%, Get 40% " campaign, where users can get a 40% discount coupon by sharing the discount code.

Temu has been online in the United States for more than two months. During this period, it has achieved an average daily GMV ( gross merchandise volume ) of over US$1.5 million , but people familiar with the matter said that this result was slightly lower than Temu’s internal expectations.

In just two months, the GMV reached nearly 90 million US dollars. Is this really not an outstanding result?

As a new platform, Pinduoduo chose the United States, a country with strict regulations and many wolves, as its first step to expand overseas. If it had followed the domestic strategy, it would have failed early. But what new strategy could it use to open a gap in the fiercely competitive American market? Therefore, many people are not optimistic about Temu's US business.

But according to US media reports, the existence of Temu is regarded by American consumers as "Everyday's Black Friday" .

Thanks to high discounts, low prices, and even free shipping, free return shipping and other promotional methods, Temu seized the consumer mentality of "if you don't take advantage of the opportunity, you'll lose", and quickly opened up the US market. Putting aside profits and long-term development, Temu's customer acquisition method is simple and crude but also works every time.

Since its launch, Temu's download ranking in major mobile phone stores has risen rapidly, even surpassing Amazon, SHEIN , Walmart , etc. at one point, which shows that it has received considerable attention.

As of now, Temu ’s 30-day repurchase rate is nearly 10% , slightly higher than similar platforms ; statistics show that it has about 30,000 merchants and 300,000 to 400,000 product SKUs .

With a successful start, Temu's expansion began to accelerate and it is now targeting the African and Canadian markets .

Although the average daily GMV is still lower than expected, the arrival of the peak sales season in Europe and the United States makes Temu optimistic about the growth expectations before the end of the year .

It is reported that Temu 's goal is to achieve a GMV of US$ 300 million to US$500 million by the end of the year , US$3 billion within a year , and US$30 billion within five years , which is also the GMV target that SHEIN is expected to achieve this year .

GMV in the first half of the year has reached 16 billion US dollars, SHEIN may exceed expectations

Earlier media reports said that SHEIN 's GMV target this year is US$30 billion . In the first half of this year alone , SHEIN 's GMV has exceeded US$16 billion, an annual increase of more than 50%.

Since 2020 , SHEIN's revenue has entered the tens of billions of US dollars track , and the growth rate in each of the eight years before 2020 exceeded 100%.

Similar   Web data statistics show that SHEIN 's website traffic ranks first among global fashion and apparel websites, ahead of household names such as Nike , Zara, Lululemon , etc.

With low prices and fashionable designs, SHEIN quickly adapts to the ever-changing fashion trends and has captured the hearts of Generation Z in the United States.

Earlier, SHEIN reported that its daily active users ( DAU) increased by 15% in the first half of the year to more than 30 million (peak of 32 million) . The average spending per consumer on the platform has also increased. The average customer unit price in the global market reached US$75 in the first half of this year , compared with US$50 in 2019, US$60 in 2020, and US$70 in 2021.

As the market size continues to expand, the requirements for logistics have also become higher. Therefore, in September, there was news that SHEIN will build or expand three large distribution centers in the United States , which will shorten the delivery time by 3-4 days . Previously, the delivery time of SHEIN products was more than a week , generally 10-15 days .

In addition to the United States, SHEIN also announced that it will establish a distribution center in Poland to serve the European market ; and open a 170,000-square-foot warehouse in Toronto to serve the North American market .

George Chiao, president of SHEIN 's U.S. operations , said the company is planning to hire aggressively in the United States in the next few years , and that SHEIN 's current U.S. market workforce is 25 times the number of employees it had in 2019 .

The entry of capital has also accelerated SHEIN's development . Since 2013, SHEIN has completed seven rounds of financing . In the F round of financing in April, it raised $1 billion to $ 2 billion at a valuation of $100 billion.

Since the beginning of this year, there have been continuous reports that SHEIN will be listed in the United States, and there are also reports that it will be listed as early as 2024.

Temu and SHEIN's battle in the United States begins

Since its launch , Temu has been considered to be following the path that SHEIN has always taken .

From the beginning, Temu’s domestic recruitment was very straightforward in showing its interest in people with past work experience at SHEIN. Several SHEIN employees said that they were exposed to Pinduoduo’s intensive “poaching” and that the company would also ask former SHEIN employees in detail about their internal work during the recruitment process. Temu’s office was even set up near SHEIN ’s headquarters .

At the same time, there are reports that SHEIN notified merchants on the platform that they would close their stores if they joined Pinduoduo.

Marketing is essential for entering a new market, and Temu’s marketing methods are almost the same as SHEIN’s .

It is reported that Instagram and Facebook are Temu 's main customer acquisition channels, and these two platforms account for 30% of Temu's traffic , which are also SHEIN's main customer acquisition channels . In order to quickly seize the low-price market, Temu 's customer acquisition cost is 30% to 40% higher than SHEIN .

However, due to high customer acquisition costs and low product pricing, Temu's average customer price was lowered to US$25, lower than SHEIN's average customer price of US$75 in the global market in the second quarter .

Although Temu's average daily GMV of US$1.5 million in the two months since its launch is slightly lower than internal expectations, it is still confident that it will take only one year to reach one-tenth of SHEIN's current GMV and quickly surpass it in the future .

It is understood that Temu 's goal is to reach total sales of US$30 billion within 5 years, while SHEIN took 14 years to achieve this goal .

After more than a decade of development in overseas markets, SHEIN has already accumulated a huge amount of overseas natural traffic and a highly sticky user group . Data shows that in the second quarter of this year , the number of SHEIN App installations on mobile terminals in the United States once again exceeded Amazon, reaching 6.8 million times .

As a newcomer in the cross-border e-commerce field, Temu is facing SHEIN , which is valued at 100 billion US dollars. Although it is difficult to shake it in a short period of time , in the future, Temu may also pose a strong threat to SHEIN .

As the overseas market is booming, the battle between SHEIN and Temu in the United States has just begun. Whether they can be evenly matched or dominate remains to be verified by time.

Temu

SHEIN