The Truth About Chinese Giants’ European Struggle

Temu and Shein quickly disrupted global e-commerce using their direct-from-manufacturer model. This strategy allowed for extremely low prices on their goods, especially in the ultra-fast fashion segment. Using their huge digital ad spend they fueled massive brand recognition worldwide. Their success centred on capturing young, price-sensitive shoppers. Thus, they became overnight market leaders in this segment.

Raise of an eCommerce Dragon

Despite launching in 2008, it has only been in recent years that Shein started to leverage it sophisticated, data-driven supply chain world wide. Temu launched in 2022, founded by the influential billionaire Colin Huang applied the same direct-from-manufacturer approach across all product categories. Their rapid European expansion has been driven by vast advertising campaigns, quickly achieving massive brand awareness and challenging established e-commerce players.

Brand Awareness vs. Conversion

Awareness for both brands is high. For instance, Temu’s brand awareness is 96%, and Shein’s is 93%. However, converting this attention into loyal customers remains a challenge. Therefore, the percentage of users who actually bought something is significantly lower.

The Stalled Shopper Share

The share of shoppers on these platforms has largely plateaued. For example, 45% of shoppers bought from Temu at least once this year. This is the exact same share as the previous year. Furthermore, Shein saw its shopper share slightly decrease from 49% to 45%. Consequently, this data confirms a slowdown in expansion across the continent. Other European platforms are now growing at a much faster rate.

Would you like to know more?

Dig deeper into the world of eCommerce with eComSignal. Check out the latest news at our blog feed, dig deeper with our Amazon-focused Deep Dives or learn how to take your business to the next level through our detailed guides.