Temu, a fast-growing Chinese e-commerce platform that sells US$4 home decor and US$10 shirts, is poised to capture US dollar stores such as industry leader Dollar General, according to the latest market share data. has been successful in
As of last month, Temu had nearly 17% market share in the U.S. discount store sector, according to data analysis firm Earnest Analytics. By comparison, dollar chain Five Below has 8%, Dollar General has 43% and Dollar Tree has 28%.
Temu launched in the US in September 2022 and quickly gained popularity by leveraging social media influencers to promote its products as better and more affordable than brick-and-mortar stores. did.
How US shopper app Temu helped PDD catch up to Alibaba in market capitalization
How US shopper app Temu helped PDD catch up to Alibaba in market capitalization
Michael Maloof, head of marketing at Earnest Analytics, said: “Tem's low prices for household goods and essentials pose a greater threat to brick-and-mortar discounters such as 100-yen stores than other online marketplaces. “There is,” he said.
While Temu sells apparel like $12 dresses and $20 sneakers, it also offers holiday decorations, storage containers, and toys similar to dollar stores. Analysts expect the company to generate more than $16 billion in revenue this year as it expands internationally.
“Tem has the advantage of novelty and excitement that is difficult to replicate with solid, low-priced discount retail brands,” said Michael Ashley Shulman, chief investment officer at Running Point Capital Advisors.
Mr. Tem, Dollar General, Dollar Tree and Five Below did not respond to requests for comment on the investigation. US Dollar Store previously said it did not see an impact on sales from Temu because it has a relatively small online presence and a different customer base.
Dollar stores have continued to do well with customers buying essentials such as food, beverages and detergent, but they have struggled with changing consumer demands and operational mistakes.
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Dollar General has lowered its annual profit forecast three times this year as budget-conscious shoppers cut spending on higher-margin discretionary items and shifted to lower-margin consumables.
100-yen stores are also cutting prices to clear excess inventory and, like many retailers, are suffering losses from retail theft, which is hurting their profit margins.
Tennessee-based Dollar General has seen the steepest decline in market share compared to its competitors, according to Earnest Analytics. Its market share in November was 43%, down from about 57% in January. Dollar Tree's share fell nearly four points, from 32% in January to 28% in November.
Peter Earle, an economist at the American Institute for Economic Research, a libertarian, free-market think tank, said Tem is benefiting from shopper fatigue caused by high prices and inflation. Temu's parent company PDD Group said its revenue for the quarter ended Sept. 30 was 68.84 billion yuan ($9.62 billion), up 94% from a year earlier.
Tem competes with Shane and Alibaba in South Korea's cheap shopping field
Tem competes with Shane and Alibaba in South Korea's cheap shopping field
Temu taps into a network of China-based manufacturers of low-cost personal electronics, clothing, and household goods. Temu factories and distributors ship products directly to Temu shoppers using the Trade Exemption Program, which allows shipments under $800 to enter the United States duty-free.
“With the slogan 'Shop like a millionaire,' Temu has mastered gamification and rewards to make online shopping fun, easy, and cheaper than dollar stores,” says Running Point's Shulman. says Mr.
