The Temu + Shein Chinese E-commerce Invasion

05/09/24 • 45 min

ShanghaiZhan: All Things China Marketing, Advertising, Tech & Platforms

Welcome to the latest invasion; it's not TikTok but Shein & Temu!
It's hard to imagine that 4 of the top 8 U.S. iPhone App Store apps are from China. While TikTok and Capcut make the list, the two big surprises are e-commerce juggernauts Temu and Shein. These companies operate unique, manufacturer-to-customer business models and do not manufacture products; they simply work with armies of factories throughout China to use powerful algorithms to serve up a plethora of options. Shein reached an estimated $24 billion in revenue in 2022, while Temu reached 161 million users worldwide. What's the future of these two platforms? How will Amazon respond? Ali and Bryce discuss this phenomenon.
1. Why have these two platforms become so popular? How do they work? How are they different?
2. What makes these platforms uniquely Chinese? What things are similar to their Chinese platforms?
3. How is Temu disrupting the market, given that it doesn't sell recognized brands and people have to wait to get its stuff?
4. Advantage Shein: consumer-responsive fashion
5. Given its incredibly responsive manufacturing model, will Shein develop more up-market products or stay on the low end?
6. Morgan Stanley says that Temu's growth is non-sustainable. Will Amazon pick up the slack?
7. How will Temu impact China's manufacturing tiers? Will it enable them to sell name brands and compete against Amazon?
8. Does Temu need to deliver a group-buy model to survive against Amazon?
9. Will Costco-style value brands emerge from the Temu model?
10. The importance of time spent on the platform and how it will impact Temu/Shein's business performance.
For everything ShanghaiZhan: http://zhanstation.com/
ShanghaiZhan Theme Music: by Bryce Whitwam
https://soundcloud.com/bryce-r-whitwam/bad-cough-syrup?si=cfb30a6e0c0e459da78b912bf60825ac
Bryce on Linkedin: https://www.linkedin.com/in/brycewhitwam/
Ali on Linkedin: https://www.linkedin.com/in/alikazmi/

Previous Episode

China's 10 Considerations for Marketers in 2024: Chris Baker & Minnie Wang

How can brands take advantage of China's new transformation? We decided to invite our livestream episode guests, Chris Baker, founder of Totem, and Minne Wang, Senior Reporter with Campaign Asia, for an in-depth discussion on 5 of the 10 considerations in Totem Media's 2024 report. The report (with links below) is a must-read for anyone looking to navigate the complexities of marketing in China for the next few years.
1. Consideration 1: Value Purchases rule - will this impact brands with weak value propositions? We think so.
2. Consideration 2: Wealth Divides Growing - are we seeing changes in the ever-important middle class?
3. Consideration 3: Trust is Under Pressure: Consumers increasingly scrutinize their purchase decisions, including those in CPG categories. How should brands respond?
4. Consideration 4: Social Commerce is Still Key - are we seeing a move away from Taobao and a greater focus on RED and Douyin?
5. Consideration 5: Brands Need Impact (and not just impressions): How do brands simultaneously focus on brand building while driving sales? How do we prioritize with fewer brand campaigns?
6. A/B Test
Download the Full Report Here: https://www.talktototem.com/china-insights/2024-china-marketing-and-media-review
Watch the China at the Crossroads Livestream Event: https://www.linkedin.com/company/78441421/admin/feed/posts/
About Totem: https://www.talktototem.com/
About Campaign Asia: https://www.campaignasia.com/
Chris Baker on LinkedIn: https://www.linkedin.com/in/cbaker19/
Minnie Wang on LinkedIn: https://www.linkedin.com/in/minniew/
For everything ShanghaiZhan: http://zhanstation.com/
ShanghaiZhan Theme Music: by Bryce Whitwam
https://soundcloud.com/bryce-r-whitwam/bad-cough-syrup?si=cfb30a6e0c0e459da78b912bf60825ac
Bryce on Linkedin: https://www.linkedin.com/in/brycewhitwam/
Ali on Linkedin: https://www.linkedin.com/in/alikazmi/

Next Episode

The 2024 Beijing Autoshow: an Auto Industry Wake-up Call, with Bill Russo

According to this week's guest, automobile industry expert Bill Russo, this year's Autoshow China, held in Beijing, was a wake-up call to the global automobile industry. China has clearly leapfrogged the global auto industry, making products that aren't just transportation vehicles but literally smartphones on wheels. According to Russo, the global auto industry is still living in the 20th century. With the EV tariffs looming in the U.S., are Westerners deprived of owning the next and best iPhone?
1. What was big at this year's Beijing auto show compared to previous ones? What made this year's show a real "wake-up call" to the auto industry?
2. What is "smartness" in EVs, and how does it differ from putting a simple plug-in EV car?
3. Why is Tesla falling behind the curve?
4. What is the smartness experience? Can you describe what it's like inside a truly smart Chinese EV?
5. What's the difference between "national security" and a "security blanket?" Will the tariffs deprive Western automakers of competition that will lead to better and more competitive innovation for their customers?
6. What is a more practical solution for the U.S. and Europe besides tariffs? Bill calls it " flipping the script."
7. How can Chinese EV auto companies stay competitive With so many new NEV brands?
Bill & Bryce's Book: "Selling To China:" https://amzn.to/3UXBrVQ
About Automobility: http://automobility.io/
Bill on Linkedin: https://www.linkedin.com/in/williamrusso/
For everything ShanghaiZhan: http://zhanstation.com/
ShanghaiZhan Theme Music: by Bryce Whitwam
https://soundcloud.com/bryce-r-whitwam/bad-cough-syrup?si=cfb30a6e0c0e459da78b912bf60825ac
Bryce on Linkedin: https://www.linkedin.com/in/brycewhitwam/
Ali on Linkedin: https://www.linkedin.com/in/alikazmi/