Shein vs. Temu: New competition in the fashion marketplace

The fashion marketplace is witnessing an exciting competition between two emerging Chinese companies: Shein and Temu. While Shein has been present in Western retail for several years, Temu is pushing hard into the European e-commerce market. These two manufacturer-to-consumer platforms are challenging traditional players and upending the established order in the fashion industry.

Shein – The fashion disruptors with AI power.

Shein, originally founded in 2012, has become a global brand in a relatively short time. With sales in 165 countries, over 5,400 contracted manufactures and more than 11,000 employees in 19 countries, the company has made the fashion industry sit up and take notice. Although specific business figures have not yet been released, there is speculation of a GMV (Gross Merchandise Value) of around $20 billion.

Shein’s secret to success lies in its intelligent use of data and extremely short production cycles. Through the use of advanced machine learning technology, current fashion trends in social media are recognized and analyzed. Based on this, Shein quickly produces new, matching products in small quantities and launches them on the market. Customer response to these test batches is immediately incorporated into production, resulting in continuous product improvement. The entire process from development to sale can be completed in less than two weeks.

Another key to Shein’s success is local customization. The company analyzes the needs and preferences of each market and produces fashion that fits perfectly. By diversifying production in different countries, Shein can also guarantee fast delivery times. In addition to China, products are now also manufactured in Brazil, Turkey, Mexico and soon in India.

Temu – The Social Media Commerce Platform

Temu, part of the PDD Holdings group, which also owns the popular Chinese online commerce platform Pinduoduo, has a different approach to the fashion marketplace. Temu is not a pure shopping app, but a social media commerce platform that relies on gamification, affiliate codes and social media marketing. The company has only recently entered the European market and is now pushing into the spotlight with low prices and a wide range of non-food items.

Temu entices customers with extensive discounts and free shipping. The company has set itself the goal of awakening customers’ needs and encouraging them to make impulse purchases. In doing so, Temu offers a huge selection of products at extremely low prices. According to experts, Temu’s prices are up to 80 percent lower than those of its competitors. However, consumers often consider the quality of the products to be inferior.

The platform relies on efficient logistics handling. By working with logistics service provider J&T Express, which has established a broad network in various countries, Temu can guarantee fast delivery times. The goods are airfreighted to the target markets and delivered via local mail and parcel services.

Shein vs. Temu – The battle for the fashion marketplace industry

Shein and Temu pose major challenges to traditional players in the fashion industry. They are setting new standards with their innovative business models and use of technology. Shein is known for its AI-driven product development and quick response to fashion trends. Temu, on the other hand, focuses on social media commerce and low prices.

For consumers, these new players offer a variety of options at affordable prices. However, they also have to compromise on product quality. Traditional retailers must respond to these challenges and rethink their own business models to compete.

The fashion marketplace industry is facing an exciting transformation. Shein and Temu show that innovation and technology are shaping the future of fashion retail. It remains to be seen how these two companies will evolve and how the established players will respond. The competition is on, and the fashion world will continue to change rapidly.