Sales on the platform that’s backed by Chinese heavyweight PDD Holdings Inc. first topped fast-fashion-focused Shein in May in the US, when it beat its rival by about 20%, according to Bloomberg Second Measure, which analyzes consumers’ credit and debit card transactions. The data show it’s extended that lead every month since and in September, recorded more than double Shein’s sales in the country.With Temu, PDD is replicating the formula of low prices and a vibrant social media presence that’s made its Pinduoduo one of the biggest e-commerce platforms in China. 

The wide array of products on offer is “arguably the most significant” factor in propelling Temu ahead of Shein, Euromonitor International analyst Fatima Linares said. “At a time when the ongoing cost of living crisis demands more budget-conscious shopping, Temu’s kitchen gadgets and electronics priced between $5 to $10 hold strong appeal,” she said.But the aggressive pricing strategy is eating into Temu’s bottom line. According to Morgan Stanley, the company sells items ranging from robot vacuum cleaners to watercolor paint sets for as much as 70% cheaper than like-for-like products on Amazon.com. And while its current offer for free shipping without the need for a minimum spend has proved popular with consumers, it’s hurting margins.Temu may see a $3.65 billion operating loss this year despite global sales of $13 billion, Sanford C. Bernstein estimates — double the revenue it predicted in January but still potentially a conservative forecast given the pace of growth. Temu’s loss may narrow to $1.9 billion in 2025, Bernstein forecasts.Shein, which has a much larger global footprint, reported $22.7 billion in sales last year, by way of comparison. The company enjoyed record profitability in the first half, CNBC reported in July, citing a letter to investors from Executive Vice Chairman Donald Tang that it obtained. The letter didn’t give an actual profit figure.

While often lumped together, the two firms do have significant differences. Shein has until now operated mostly under its own brand and specializes in fashion, while Temu acts as an intermediary that lets consumers buy anything from jeans to knives and headphones directly from suppliers. Both however rely on extensive supply chain networks in China and are in a constant battle for talent. Temu has headhunted Shein employees by offering to triple their compensation and tried to work with its competitor’s suppliers.Shein declined to comment while representatives for PDD and Temu didn’t respond to a request for comment.There’s still room for both Temu and Shein to grow considering penetration among Chinese e-commerce operators globally remains low, said Lingyi Zhao, the chief retail and e-commerce analyst at SWS Research.But after a phenomenal 12 months, it won’t be smooth sailing for Temu. Concern around product quality will set in over the long run even though Temu has managed to secure a footing among consumers in developed nations battered by runaway inflation, Zhao said. The company is also wading into drastically different legal and political landscapes as it expands in more countries, she added.Their rivalry is now playing out in court. In December, Shein sued Temu in the US, alleging trademark and copyright infringement as well as “false and deceptive business practices.” Then in July, Temu sued Shein, alleging it violated antitrust laws by using threats and intimidation to block clothing manufacturers from working with the firm.Temu has had Shein in its sights since the very start. Earlier this year, it set an explicit target for its North American business to report at least a single day of gross merchandise value that tops Shein’s by the start of September — a target it’s blown past. The company has also been one of Apple Inc.’s top iOS apps in the US most days this year in a rare success story for a Chinese tech firm in that market.The intensifying competition coincides with Shein’s pivot to selling products other than its own, although global head of public affairs Leonard Lin said in June the move isn’t a reflection of what other platforms are doingคำพูดจาก สล็อตแตกง่าย. Shein will always focus on what it can offer the young female shoppers that are its core clientele, he said.Top of that list is fashion, where Shein’s years-long dominance endures. It’s common to see a manufacturer get a $50 million annual order for Shein, while those who work with Temu typically secure nothing over $15 million, one Guangzhou-based apparel supply chain veteran, who helps both firms to recruit suppliers, said. Shein also acquired a stake in the operator of fast-fashion retailer Forever 21 in August to expand its online offerings and establish a brick-and-mortar presence in the US.Temu also faces increasing scrutiny from US government officials about potential data security risks for American consumersคำพูดจาก สล็อต666. Montana — the first state to outlaw ByteDance Ltd.’s Tiktok — has banned Temu, while Google suspended the Pinduoduo app after it discovered malware in unsanctioned versions of the software.And there’s criticism of them both for the mounting waste produced by so-called throw-away fashion. Addressing such concerns will be “one of the most daunting tasks,” Euromonitor’s Linares said.“At some point the model will reach its maturity and the newness aspect that initially drew in consumers will wane,” she said.