The platform, which mainly offers low-priced goods, has seen a surge in online searches for its platform, 10 times that of H&M and 15 times that of Zara during the same period, according to a report by Morgan Stanley analysts.
Since its debut in the United States in September 2022, Temu is now present in 47 countries, with over 223 million app downloads and 120 million monthly active users.
The majority of these users (43%) are in the United States, where the platform has cultivated a large following among young female consumers.
Despite Temu’s impressive performance, Pinduoduo’s stock price has actually experienced some volatility. Since the beginning of the year, the company’s shares have risen 24%, but have retreated after a short report from Grizzly Research came out.
However, Morningstar analysts defended Pinduoduo against these allegations, saying that no U.S. government agencies have taken any regulatory action against the company so far, and assured that the platform will actively make adjustments if regulators raise concerns.
Meanwhile, traditional retailers may soon be at the centre of market attention as they grapple with the disruption wrought by Temu’s rise.
Another UBS study showed that while 83% and 74% of consumers surveyed now said they were aware of Temu and Shein, fewer claimed to have shopped on the two platforms - 34% and 41% on Temu and Shein, respectively.
UBS analysts warned that retailers like Walmart and Target could face significant risks if these value-for-money retailers continue to gain traction.
Studies have shown that consumers may shift spending from these brands to Temu, and analysts predict that if these emerging companies can capture 0.5% of US retail sales by 2026, their revenues could soar from the current $10 billion to $33 billion.
Temu’s rapid growth highlights the changing dynamics of the retail industry, and how low-priced goods offered by e-commerce platforms have the potential to disrupt traditional retail models. Temu USA retail |
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