Quote from Ndubuisi Ekekwe on March 21, 2024, 1:05 PM

How Chinese firms do growth: massive acceleration. In the ecommerce world. Temu is giving Amazon a real problem.

Move over, Walmart and Target: Amazon has new competition. Insiders at the e-commerce giant are growing increasingly worried about Asian newcomers Temu and Shein, The Wall Street Journal reports, citing anonymous sources. Temu, in particular, has spent billions on advertising that targets Amazon customers. With Temu and Shein shipping directly from China, Amazon executives believe they can maintain their edge by focusing on customer trust and faster delivery, per the Journal. Temu has, however, just expanded to U.S.-based sellers in an effort to speed up the process.

• Temu's U.S. monthly active users grew to 51.4 million in between its Sept. 2022 launch and January 2024, per Sensor Tower, and Shein's jumped from 20.9 million to 26 million, but Amazon's dropped from nearly 70 million to 67 million.
• Temu's rapid growth could be jeopardized by increasing scrutiny and restrictions from U.S. lawmakers.

Temu's U.S. business is booming — and Big Tech is reaping the rewards. Temu's parent company spent almost $2 billion on Meta ads last year in a bid to expand its U.S. consumer base, The Wall Street Journal reports, citing anonymous sources. (Temu disputes this figure.) Meanwhile, Google has "actively courted" Temu's business, and the e-tailer has now become one of its top five advertisers, per the Journal. The sheer volume of ad spending by Temu, Shein and competitors is driving up the cost of other ad spots, the CEOs of Etsy and Pinterest have said.