US Shoppers to Spend More at Temu, Less at Shein But Amazon Still Tops
Seventy percent of U.S. consumers have shopped on Temu or Shein, with many planning to spend more this year on Temu and less on Shein.
Those spending plans—apparel and accessories are the core shopping categories—means consumers will opt to spend less on Amazon. But consumers also say they don’t expect Temu or Shein to become their primary online platform, and if they could purchase apparel from only one website, Amazon would be the top choice.
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According to the data points, important shopping criteria such as product quality at 60 percent and fast shipping time at 29 percent are likely key obstacles to making either Temu or Shein the preferred destination. A favorable return policy at 28 percent is also an obstacle at both sites, with Temu allowing a return within 90 days of the date of purchase instead of the date of receipt and Shein within 35 days of the purchase date. Delivery times for Temu to the U.S. can take as long as 25 business days, while Shein’s standard shipping timeframe can take up to 15 calendar days.
Those are some of the findings from a survey from Jefferies, according to technology analyst Brent Thill. The survey polled 600 U.S. consumers. Of the 70 percent who said they tried one, 56 percent said they have shopped on Temu and 40 percent on Shein. Apparel and accessories was the most popular product segment, with 56 percent on Temu and 69 percent on Shein. Those surveyed said low prices and promotions or discounts were the primary reasons for shopping on the sites.
In addition to Amazon, Target and Walmart were other retailers cited that could see some share loss in apparel and accessories sales. Specialty retailers American Eagle, Nordstrom and Abercrombie & Fitch were cited as at least risk from Temu, while Nordstrom, Revolve and Gap were named as having the least risk from Shein.
Nearly half of shoppers on the two sites said they expect their spend in 2024 to remain unchanged from 2023. Thill’s analysis of the data points showed a planned increase in spend on Temu this year, due to the plus-13-point gap between those who plan to spend more versus those pulling back. In contrast the gap for Shein was minus 2 points.
Forty-five percent of U.S. consumers said 40 percent of their apparel purchases are branded. For now, platforms that sell a wide assortment appear insulated from competition from either Temu or Shein, neither of which have inventory from U.S.-based apparel brands.
“While our survey suggests that Temu and Shein are successfully penetrating a cost-conscious apparel shopper during a period of tradedowns, we question whether they will be able to successfully expand their offerings and sustainably grow their existing shopper base,” Thill said.
In a research note last month on Amazon.com, Thill concluded that even with impressive app downloads, Temu and Shein’s combined U.S. monthly unique visitors are still only one-quarter of Amazon’s U.S. audience.
“Amazon’s broad selection, free and fast shipping and higher shopper frequency provide key advantages,” Thill concluded.
Apparel and accessories is Amazon’s second largest product segment by sales in the U.S., behind consumer electronics. The analyst said that even though Temu and Shein are challenging Amazon in the apparel and accessories category, the latter retains several advantages. They include an unmatched product assortment including branded apparel, and easy return process and fast or free shipping. And Thill noted that Amazon has shown it is willing to adapt. The company recently adjusted seller fees for third-party sellers in the apparel category, dropping its take to 10 percent for apparel under $20 and 5 percent for apparel priced under $15, from 17 percent.
“Take rate changes should help Amazon expand its selection in lower-priced fast fashion apparel and allow them to be more competitive,” Thill said.
Separately, Shein and Temu have been embroiled in lawsuits with each other as they jockey for U.S. market share, while Temu reportedly is considering opening its marketplace platform to U.S. and European sellers.
