Chinese language retailers Shein, Temu set to lose | Australian Markets
Fashionable and ultra-cheap Chinese language retailers Shein and Temu are tipped to lose clients this yr as Australians change into more and more sceptical of the manufacturers’ high quality, based on new analysis.
Since their arrival in Australia, Shein and Temu have taken a giant chunk of market share because of aggressive promoting campaigns as cost-of-living pressures push customers in the direction of cut price choices.
However contemporary analysis from e-commerce and market group Sample Australian revealed solely 12 per cent of customers trust Temu for its product high quality, resulting in a forecast 7 per cent drop in customers.
Shein faces related challenges, with trust ranges at simply 11 per cent.
Sample managing director Merline McGregor mentioned many customers had trialled Shein and Temu over the previous 18 months.
“Yet early adopters have found these marketplaces unreliable. Although they may still expand in the future, Temu and Shein face a significant challenge in legitimising themselves within the Australian market and delivering on the customer experience,” she mentioned.
“Meanwhile, Catch has closed, Kogan and MyDeal are growing . . . and early enthusiasm for low-cost Chinese marketplaces appears to have peaked as they struggle to meet shopper expectations.”
Alarmingly for Temu, solely 43 per cent of customers would take into account shopping for from the retailer in 2025, and even this could hinge on enhancements in high quality and supply.
Temu was probably the most downloaded iPhone software in Australia final yr, based on Apple. Globally, it holds the highest spot in 25 markets throughout more than 30 international locations and areas with official Apple rankings.
The Sample information got here simply weeks after Wesfarmers’ determination to axe its loss-making market Catch, conceding it couldn’t compete with Amazon and its Chinese language rivals.
The competitors squeeze has seen its gross sales more than halve from a peak of $528 million in 2021 to $227m final financial yr, with cumulative pre-tax losses hovering to $400m. That included $96m misplaced within the 12 months to final June.
“The recent increase in competitive intensity in the Australian e-commerce sector has affected Catch’s financial performance and growth prospects,” Wesfarmers managing director Rob Scott mentioned on the time.
Competitors from new entrants like Shein and Temu has additionally been blamed for the demise of many Australian clothes manufacturers together with Oroton and more not too long ago, Noni B’s mum or dad Mosaic Manufacturers.
Final month, Harvey Norman chair Gerry Harvey proposed a authorities inquiry into Shein and Temu, calling them pariahs that didn’t pay taxes or make use of native people.
He additionally flagged potential security issues, saying customers may have “a lot more comfort” shopping for from trusted manufacturers regardless of it being barely more costly.
In accordance with Roy Morgan, 3.8 million Australians bought from Temu within the 12 months to August 2024, whereas 2 million shopped by way of Shein.
It estimated Shein and Temu had close to a mixed $3 billion in annual gross sales within the yr to final June.
Ms McGregor mentioned whereas the 2 Chinese language retailers confronted challenges in 2025, the Jeff Bezos-founded Amazon has cemented its place as Australia’s main market.
The platform attracted 1.1 million new Australian customers in 2024, bringing its whole to 7.9 million customers. This accounted for 10 per cent of the nation’s whole online procuring spend, Sample mentioned.
As many as 63 per cent of Australians plan to buy on Amazon in 2025.
Ms McGregor mentioned online marketplaces in Australia had been set for sturdy growth in 2025.
“With 94 per cent of Australians already shopping on these platforms, brands can’t afford to sit on the sideline. They must be present where consumers shop,” she mentioned.
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