Temu says to reduce costs for consumers by making manufacturing smarter and more tailored to their needs, eliminating expenses arising from wasteful production and inefficient distribution. Temu offers free delivery on all orders, while Shein shoppers do not pay for fulfillment on orders over £35. Prices and qualityĪlthough Statista named Shein the cheapest womenswear retailer in 2022, with dress prices averaging $15.74 (£12.89), Temu’s dresses seem to sell primarily under $13 (£10.64). The additional cost savings from optimszing pre- and post-production stages are passed onto consumers. Thanks to that, suppliers can design more personalised products, accurately plan production volumes and efficiently manage warehousing and shipping. Its business model relies on reverse-manufacturing, where it eliminates the middlemen in the distribution process.Īdditionally, it utilises PDD Holdings’ ‘Next-Gen Manufacturing’ model to provide manufacturers with enhanced insights into consumer preferences and shopping behaviours. This allows the retailer to offer a wide range of items, escaping Shein’s narrow focus on fashion. Unlike Shein, Temu operates like an Amazon-like marketplace, selling products from suppliers across the globe, but primarily located in China. The findings prompted Shein to invest $15 million (about £12 million) to improve standards at suppliers’ factories. They are also further penalised two-thirds of their daily wage for mistakes. Workers make a minimum of 500 garments a day at the factory. However, the online retailer has come under fire after a Channel 4 documentary exposed “inhumane” working conditions at Shein’s supply factories in Guangzhou.Įmployees were alleged to work 18 hours a day in violation of Chinese labour laws, and are severely underpaid, with those at one factory earning a base salary of 4,000 yuan a month or £476. It operates four research and development facilities in the Chinese cities of Nanjing, Shenzhen, Guangzhou and Hangzhou, as well as six logistics centres in Foshan, Nansha, Belgium, India and the US, employing over 10,000 people. Similar to other discount retailers like Wish or Ali Express, Shein relies on several wholesale warehouses. Temu, on the other hand, currently has no physical presence. With a brand mantra of “everyone can enjoy the beauty of fashion”, Shein has invested in pop-up stores in major cities like London, Birmingham and Paris, to grow its brand awareness. Shein has evolved from the wedding dress wholesaler Sheinside in 2015 to become the world’s largest fast-fashion retailer valued at $100 billion (£81.9 billion) in April 2022. Temu Vs Shein Business modelsīoth Temu and Shein offer cheap products through their online platforms, yet their business models differ significantly. And while the platform seems to be quite similar to rival Shein, it operates very differently. Its website focuses on heavy discounts, with up to 90% off on selected items and other “lightning deals”. The ecommerce app even launched a Super Bowl ad earlier this year with the tagline “shop like a billionaire”, neatly describing the retailer’s selling point: customers don’t have to worry about their budget because of how affordable Temu’s products are. It actively makes use of PDD Group’s vast and deep network of merchants and logistic partners. Gross merchandise value (GMV) increased from $3 million in September 2022 to $192 million in January 2023, according to New York-based market research firm YipitData.Īccording to Temu, it “connects consumers with millions of sellers, manufacturers and brands around the world with the mission to empower them to live their best lives”. On Google Play, Temu has been downloaded over 10 million times. Since its launch in September 2022, Temu has quickly gained traction and became the most downloaded shopping app in the US earlier this month.Ībe Yousef, a senior insights analyst at analytics firm Sensor Tower, told CNN that “app installations for Temu exceeded those for Amazon, Walmart and Target” in the fourth quarter of 2022. The app is eyeing global domination and is said to be targeting expansion in Africa and Latin America.īut what is Temu? Is it reliable and how different is it from Shein, its biggest rival that has just opened another pop-up store in Birmingham? Temu on the rise Now, Temu’s said to be coming to the UK, just weeks after entering Australia and New Zealand and starting tests in Canada. Temu was founded in Boston, Massachusetts, by PDD Holdings, which also operates Pinduoduo – one of China’s most popular ecommerce apps that was suspended from Google over malware this week. It took Temu just four months to beat WhatsApp, TikTok and Instagram as the top ranked app in the Apple App and Google Play stores – and it has no plans to stop, with its UK launch understood to take place imminently.
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