Monthly sales of 600,000 units of a single product! Chinese e-commerce and sellers are booming in the US

2023 is coming to an end. What has shocked the cross-border circle in the past year is undoubtedly the rapid development of the "Four Little Dragons Going Overseas" of shein, AliExpress, Temu and TikTok Shop. This e-commerce force from China is encircling Amazon with great momentum!

With the help of e-commerce platforms such as shein and Temu, some sellers place 50,000 orders a day, while some merchants receive up to 600,000 orders for a single product per month. Made in China has also become a huge driving force for the "Four Little Dragons Going Overseas" to encircle Amazon.

Shein and Temu’s average daily parcel delivery volume in the U.S. is estimated to be 1 million

The end of the year has arrived. Many cross-border sellers have summarized the past year and set plans for the new year. The consensus is that they must develop multiple stores and multiple platforms and seize the traffic dividends from platform development.

The focus of cross-border sellers' multi-platform layout is the fast-growing platforms such as Shein and Temu , whose development cannot be ignored. At present, Shein and Temu's average daily parcel delivery volume in the United States is estimated to be 1 million, which can already challenge some well-known American retailers.

Recently, Morning Consult, a well-known American consulting firm, released the "Top Ten Fastest Growing Brands in the United States", and shein ranked fourth. It has also become one of the most popular brands among millennials in the United States. Data from research company Apptopia shows that American consumers spend almost twice as much time on Temu as major competitors such as Amazon.

The latest data from Sensor Tower shows that as of November 2023, Temu and shein have seen strong growth in downloads, ranking the top two in global downloads.

The rapid development of shein and Temu is inseparable from domestic sellers, and it also benefits some domestic sellers.

A Temu seller shared that he opened dozens of stores, with 50,000 orders a day, and the staff worked non-stop on weekends to pack and ship. There was also a second-generation leading factory that did OEM for Amazon platform brands and transformed from traditional foreign trade to cross-border e-commerce business. It entered Temu as soon as possible last year, and its sales in November this year have reached 1.6 million.

A supplier of Shein now delivers 20,000 to 30,000 pieces of a single popular product a day, and about 600,000 pieces a month. In Jiangnan Village in Panyu, Guangzhou, there are many myths about how to get rich. A fellow villager from Jiangxi who met Shein's supplier standards bought a house and drove a luxury car in Guangzhou within two years.

Seeing the cases of their peers, many cross-border sellers also joined the shein, Temu and other platforms with the strategy of joining if they can't beat them. As of October this year, Temu has recruited 90,000 merchants and supplied more than 1 million SKUs.

In early December, Amazon seller Zhiou Technology said that the company has entered the shein US, German and Spanish sites. It also said that the company will pay close attention to the traffic changes of emerging platforms such as shein and Temu, and will choose platforms that are suitable for the company's product positioning to cooperate. Zhiou is just one of many big sellers and factories.

With the participation of many high-quality domestic sellers and supply chains, the development of shein and Temu has been greatly enhanced, and they are gradually eroding Amazon's market share.

Amazon may be replaced

Recently, a foreign media person said that Shein and Temu may eventually replace Amazon. The media person mentioned that opening up to cheap foreign products can help Amazon occupy the e-commerce market, but it may also lead to its eventual elimination because the company's operating method has undergone an important change.

In 2000, Amazon allowed third-party sellers to join and sell goods directly to consumers. Currently, about 60% of the products on Amazon come from third-party sellers, and the number of third-party sellers on Amazon has exceeded 2 million. Amazon seems to have become a middleman.

But the scary thing is that Americans have found a way to eliminate the middleman. They can choose to bypass Amazon and buy through shein and Temu.

Shein and Temu bring together products from many different Chinese sellers. The types of goods that consumers may find on Amazon can also be found on shein or Temu , and some goods may be priced at half of Amazon. At the same time, many Chinese sellers selling on Amazon will also turn to Temu and shein to sell simultaneously on multiple platforms.

After launching last September, the company has revenues of about $16 billion, making it 75% the size of Target. Clearly, Temu's low prices are working, especially with rising inflation and some concerns about the economy.

But Amazon makes hundreds of billions of dollars a year. Is it really in danger?

Maybe it 's hard to say. Amazon won't be in danger immediately. Americans still like Amazon, but over time, the experience of consumers shopping on Amazon has become an experience of doing business with foreign sellers. Many Americans have become accustomed to it and no longer feel that there are risks in doing business with foreign sellers.

If companies like Temu and Shein can satisfy enough customers for long enough, Amazon will eventually get into trouble.

Made in China becomes the driving force behind the fight against Amazon

Made in China will also become a huge driving force for Chinese e-commerce platforms to continue to encircle Amazon.

Shein and Temu shopping apps have become the most downloaded apps in the world , and the downloads show the ambition. Shein and Temu also represent the third iteration of Chinese commerce.

The first was "Made in China." Domestic retailers outsourced production to China, and many shoppers didn't care where the goods were made.

The second was "Sales from China." Chinese sellers sold through Amazon and took market share from American sellers. Their growth was aided by Amazon's fulfillment services, which made consumers gradually ignore the seller's business location.

The third is "China Marketing". The rise of Chinese retail platforms is helping Chinese sellers get rid of Amazon's restrictions. Chinese factories that once did OEM for brands such as Nike can now sell their products directly to consumers through platforms such as shein and Temu.

For decades, Chinese factories have been doing OEM for American retailers and brands, and then "Made in China, Sold by Amazon" disrupted this model. Sebastian Gunningham, senior vice president of Amazon Marketplace, wrote in an internal email in 2015: " The Chinese factories that have made products for Walmart and other brands for the past 20 years now realize that they have the opportunity to build their own brands and sell directly to the world without middlemen... We are that platform . "

Today, nearly half of the top ten third-party sellers on Amazon are Chinese companies. It is not surprising that a separate retailer has been built around Chinese sellers , with platforms such as shein and Temu emerging.

Although it has only been online in the United States for more than a year, Temu may be the fastest retailer in history to grow from zero to scale, thanks to the financial support of its parent company Pinduoduo. Since its launch in the United States, it has added about fifty more markets and became the most downloaded app in the United States every day in 2023.

Shein was developed earlier and represents the power of " Chinese marketing" because it is a marketing powerhouse with a huge social network. For example, it has more followers on Instagram than Amazon and Walmart combined.

The outsized impact of shein and Temu can also be seen in U.S. import data, with more than 1 billion packages entering the country under de minimis exemptions in the fiscal year ending September 30 , a record high and double the level of 2019, according to The Wall Street Journal.

Amazon can no longer ignore them. Amazon responded to Shein by reducing commissions on clothing. Currently, Shein is a magnitude smaller than Amazon in terms of numbers, with a GMV of more than $40 billion in 2023, less than 10% of Amazon's. But most of the $40 billion is in clothing.

Shein, Temu and AliExpress now have a combined monthly web traffic of more than 1 billion visits, which is about half of Amazon in the United States and twice of Walmart. Although these Chinese e-commerce forces are currently one order of magnitude smaller than Amazon, they are already quite large in terms of overall development speed and trend .

As this Chinese e-commerce force develops rapidly, competition is also extremely fierce. The "fierce battle" between shein and Temu seems to have never stopped. TikTok is also focusing on its e-commerce business this year and making large-scale adjustments to confront shein and Temu head-on.

An industry insider said that shein, Temu, and TikTok will definitely fight in North America next year, and which platform to choose is an issue that cross-border sellers and suppliers need to consider seriously.

Temu

SHEIN

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