Chinese budget e-commerce app Temu is snatching business from US dollar stores ahead of lucrative holiday season
- In November, Temu accounted for nearly 17 per cent of discount store market share in the US, according to data analytics firm Earnest Analytics
- The platform’s novelty and ad campaigns of have helped Temu see enormous growth in the year since it was launched by China’s PDD Holdings
Temu, the fast-growing Chinese e-commerce platform selling US$4 home decor and US$10 shirts, is successfully taking on US dollar stores including industry leader Dollar General, according to the latest market share data.
As of last month, Temu accounted for nearly 17 per cent of market share in the United States within the discount stores categories, according to data analytics firm Earnest Analytics. That compares to 8 per cent for the dollar chain Five Below, 43 per cent for Dollar General and 28 per cent for Dollar Tree.
Temu launched in the United States in September 2022 and quickly became popular through its use of social-media influencers to tout its merchandise as better and more affordable than traditional stores.
“Its (Temu) low prices on household goods and consumer staples makes it more of a threat to bricks-and-mortar discounters like the dollar stores than other online marketplaces,” said Michael Maloof, head of marketing at Earnest Analytics.
Temu sells apparel including US$12 dresses and US$20 sneakers, while also offering similar holiday decor, storage containers and toys as dollar stores. Analysts expect it to generate more than US$16 billion in revenue this year as it expands internationally.
“Temu has the advantage of novelty and excitement that is hard to re-create for staid low-end discount retail brands,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.
Temu, Dollar General, Dollar Tree and Five Below did not respond to requests for comments on the research. The US dollar stores have said previously they do not see an effect from Temu on their sales because of relatively smaller online presences and differing customers.