In the midst of the holiday shopping frenzy, emerging online retailers Temu.com and Shein are capturing the attention of millions of potential customers. However, when it comes to converting visits into sales, they face a significant gap compared to the industry leader, Amazon.com.
According to website data tracking firm SimilarWeb, an overwhelming nine out of ten visitors to Temu and Shein are classified as window-shoppers, not active buyers.
Shein, based in Singapore, diversified its product range this year, introducing items like $100 kitchen mixers, $10 bathroom holiday decorations, and $6 headphones, alongside popular clothing items such as $13 dresses and $16 jeans. Meanwhile, Temu, backed by PDD Group, focuses on affordability with offerings like $9 dresses and $12 women’s shoes.
In October, Shein’s website attracted an impressive 28.6 million unique monthly visitors, marking a 7.25% increase from the previous year, as per SimilarWeb. However, the conversion rate from visits to transactions declined from 4.6% to 4.1% year-over-year. In stark contrast, Amazon dominated the market, with 56% of its 268 million monthly visits resulting in actual purchases.
Temu, having launched in the U.S. in September 2022, experienced a surge in popularity, boasting 42 million unique monthly visitors in October 2023, a fourfold increase from the previous year. Nevertheless, only 4.5% of these visits translated into actual transactions.
The uptick in website traffic is attributed to robust marketing strategies. Shein, in particular, is intensifying its holiday marketing efforts in the U.S. and Europe, expanding its reach and product offerings. Notably, its recent acquisition of U.K.-based online retailer Missguided elevated its valuation to a staggering $90 billion.
In terms of advertising spend, Shein outpaced its rival, Temu, increasing its expenditure by 60% in the first two weeks of November compared to the previous year. Temu, on the other hand, doubled its ad spend during the same period.
Shein’s presence reached new heights with a pop-up shop in New York’s Times Square within the Forever 21 store, showcasing home goods and apparel, accompanied by its first Times Square billboard.
Despite Shein’s success, it faces stiff competition from fast-fashion incumbents like Zara and H&M, as well as from online marketplaces like Temu.com and the ever-dominant Amazon.
Melissa Minkow, Director of Retail Strategy at CI&T, emphasized that online shoppers inherently favor Amazon due to its extensive product categories, rapid shipping speeds, and customer-friendly return policies.
During October’s two-day Prime event, Amazon witnessed an increase in both purchasing visits and unique visitors compared to the previous year, according to SimilarWeb. Amazon’s reduced spending on holiday advertising in early November did not hinder user engagement, as reported by SensorTower.
As the competition intensifies in the lead-up to Black Friday, Peter Pernot-Day, Head of Corporate Strategy at Shein, advised their marketplace sellers to optimize product listings by providing competitive pricing and keeping inventory up to date.
