The Rise of Impulse Buying: Temu and Shein’s Impact on the Online Shopping World
Shopping on Temu can feel like playing an arcade game. Instead of using a joystick-controlled claw to grab a toy, visitors to the online marketplace maneuver their computer mouses or cellphone screens to browse colorful gadgets, accessories, and trinkets with prices that look too good to refuse.
The Business Models of Temu and Shein
By all accounts, we’re living in an accelerating age for consumerism, one that Temu, which is owned by the Chinese e-commerce company PDD Holdings, and Shein, its fierce rival, supercharged with social media savvy and an interminable assortment of cheap goods, most shipped directly from merchants in China based on real-time demand.
The business models of the two platforms, coupled with avalanches of digital or influencer advertising, have enabled them to give Western retailers a run for their money this holiday shopping season.
Rise to Prominence
Software company Salesforce said it expects roughly one in five online purchases in the U.S., the United Kingdom, Australia, and Canada to be made through four online marketplaces based or founded in Asia: Shein, Temu, TikTok Shop, and AliExpress.
Analysts with Salesforce said they are expected to pull in roughly $160 billion in global sales outside of China. Most of the sales will go to Temu and Shein, a privately held company which is thought to lead the worldwide fast fashion market in revenue.
Influencing Consumer Behavior
Lisa Xiaoli Neville, a nonprofit manager who lives in Los Angeles, is sold on Shein. The bedroom of her home is stocked with jeans, shoes, press-on nails, and other items from the ultra-fast fashion retailer, all of which she amassed after getting on the platform to purchase a $2 pair of earrings she saw in a Facebook ad.
Concerns and Controversies
Despite their rise, Temu and Shein have proven particularly ripe for pushback. Last year, a coalition of unnamed brands and organizations launched a campaign to oppose Shein in Washington. U.S. lawmakers also have raised the possibility that Temu is allowing goods made with forced labor to enter the country.
Future Plans and Challenges
More recently, the Biden administration put forward rules that would crack down on a trade rule known as the de minimis exception, which has allowed a lot of cheap products to come into the U.S. duty-free. President-elect Donald Trump is expected to slap high tariffs on goods from China, a move that would likely raise prices and across the retail world.
Conclusion
The rise of Temu and Shein has brought about a new era of impulse buying, where consumers can quickly and easily browse and purchase a wide range of products at affordable prices. While this has led to a surge in sales for these platforms, it also raises concerns about the environmental and social impacts of fast fashion and the potential for goods made with forced labor to enter the market.
FAQs
Q: What is Temu?
A: Temu is an online marketplace owned by the Chinese e-commerce company PDD Holdings.
Q: What is Shein?
A: Shein is a privately held company that leads the worldwide fast fashion market in revenue and is known for its affordable and trendy clothing and accessories.
Q: What are the concerns surrounding Temu and Shein?
A: There are concerns that Temu and Shein may be allowing goods made with forced labor to enter the market and that their fast fashion business model has negative environmental and social impacts.
Q: How have Temu and Shein impacted the online shopping world?
A: Temu and Shein have brought about a new era of impulse buying, where consumers can quickly and easily browse and purchase a wide range of products at affordable prices.
