The rise of Chinese cross-border e-commerce platforms in overseas markets like TikTok Shop, Shein and Temu are providing sellers with more options.
Shein, a ultra-fast fashion retailer founded in 2008, first relied on platforms like Amazon and eBay. Later, the company built its own mobile shopping app and gradually entered markets in North America, Europe, Russia, the Middle East and India. Using China’s strong supply chain, Shein undercuts the competition with daily updates of new and cheap products tailored to regional tastes. In May 2021, Shein overtook Amazon as the most downloaded shopping app.
Not far behind is Temu, the overseas arm of leading Chinese online retailer Pinduoduo. In February 2023, Temu debuted in the US market through a 10 million yuan (US$1.4m) Super Bowl advertisement. The company soon topped US app download rankings in early April, according to US-based data analysts Sensor Tower. Temu has since launched in Australia, UK, Germany, the Netherlands, Italy, France and Spain.
A report by Zheshang Securities shows that prices on Temu are 53-80 percent cheaper than Shein for the same categories of products, including clothing and accessories.
Many Chinese e-commerce platforms have followed suit in Europe, the US and emerging Southeast Asian and Middle Eastern markets.
Among the 836 cross-border sellers surveyed by Yuguo, 35 percent opened shops on Amazon and 12 percent have stores on TikTok Shop.
“In recent years, new players are attracting customers with new marketing ideas and diverse competition tactics. But low prices remain their most obvious advantage,” Jiang Na, chief marketing officer of global e-commerce platform KJT, told NewsChina.
Emerging platforms like Temu and TikTok Shop are new favorites for Chinese vendors. Though Shein promotes its own product lines, it is expected to open to third-party merchants in the US this year after piloting in Brazil and Mexico.
KJT-owned Zaful, a women’s clothing brand with its own website and stores on Alibaba’s AliExpress and Amazon, opened on Temu at the end of 2022. “Now it has eight shops on Temu and gets about 1,500 orders a week, an obvious growth in sales,” Jiang Na said of Zaful, which focuses on the UK and EU markets.
Booster, once catering to Amazon wholesalers, now sells directly to international customers on platforms like AliExpress, Shopee and local Latin American e-commerce sites. Li Daqian said he plans to expand into interest-based e-commerce (selling by engaging with entertaining videos and streaming like TikTok) and invest in TikTok Shop’s Southeast Asian platforms.
In 2022, TikTok Shop’s cross-border e-commerce covered six markets, such as the UK and Southeast Asia, with a GMV (gross merchandise value) of US$4.4 billion in the latter region – over four times the previous year’s total.
Platforms like Temu, which offers everyday items at very low prices, may draw Amazon customers seeking better deals, but may sell their own brands at higher prices in the future, Jiang Na said.
Although Chinese e-commerce platforms lag behind Amazon, their impact is growing, says Wu Yihui, founder of Egainnews, an e-commerce services provider for cross-border sellers.
Long-term shifts in market share could occur if Chinese sellers, who made up 26 percent of Amazon’s GMV in 2022, migrate to platforms like Temu, Wu said.
Yuguo’s report suggests sellers are hoping to secure early positions in new platforms like Temu, expecting Pinduoduo’s domestic success to be replicated abroad. Wang Jian, a professor at Beijing-based University of International Business and Economics, noted at Yuguo’s annual summit in February that despite ongoing demand-supply turbulence across the world, diverse platforms offer chances for Chinese SMEs to enter the global market.