Next-generation Chinese e-commerce apps, led by Temu, Shein and TikTok Shop, emerged last year as an online retail force in large consumer markets around the world, including the United States, on the back of their highly competitive pricing strategy, which has challenged more established global shopping platforms such as Amazon.com.
These apps, which were created for overseas markets, entice international consumers with prices that are cut to the bone and efficient delivery services, while bypassing traditional intermediaries like exporters, wholesalers and bricks-and-mortar retailers, according to Zhang Yi, chief executive at market research firm iiMedia in southern Guangdong province.
Temu, for example, became the most downloaded app in any category during the last week of 2022, according to the latest data from mobile market intelligence service AppMagic.
The Shein-style budget shopping app, which was launched by Shanghai-based e-commerce firm Pinduoduo in September last year, was also the most downloaded app in the US in November and December, according to mobile app market intelligence provider Sensor Tower. Temu had 13.6 million installations in the US, or 96 per cent of its global total, at the end of last year.
The popularity of Temu, which has attracted US consumers to buy made-in-China goods like US$4.09 winter gloves, came on the heels of the success of Shein. The Chinese fast-fashion retailer surpassed Amazon as the most downloaded shopping app in North America in 2021, thanks to merchandise like US$5.50 leggings and US$9.90 puffer vests.
Shein, which does not also operate a shopping platform on the mainland, was founded in Nanjing, capital of eastern Jiangsu province, in 2008 by former wedding dress exporter Chris Xu Yangtian.
TikTok Shop, which was rolled out by tech unicorn ByteDance in the US last November, takes advantage of the hit global short video app TikTok’s vast overseas user base. In the US alone, TikTok has more than 100 million active users.
“China’s e-commerce market has matured,” iiMedia’s Zhang said.
Zhang indicated that the era of high growth in mainland China for the likes of Alibaba Group Holding, JD.com and Pinduoduo is largely over. As such, all these firms have a strong desire to launch in new growth markets, he said. Alibaba owns the South China Morning Post.
TikTok Shop is already inviting American influencers and merchants to sign up with its online marketplace, which could help increase cross-border e-commerce activities.
Apart from the US, Chinese e-commerce apps are finding success in Asia. TikTok Shop, for example, had sales of 1.69 trillion Vietnamese dong (US$72 million) in the Southeast Asian country in November last year, according to local e-commerce consultancy Metric.vn.