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Australian Brands Face Increasing Pressure From Temu and Shein

Australian brands are facing increasing pressure from ultra-cheap Chinese-owned online-only platforms Temu and Shein as 2 million Australians shop on these platforms each month.

According to a report by Roy Morgan, the incredible rise of these kinds of ultra cheap online retailers can be attributed to the cost of living crises, together with the normalisation of online shopping.

This formula has created a perfect storm for Temu and Shein, with Shein now having close to 800,000 shoppers each month in Australia for clothing and accessories, and Temu which, in just one year has built a vast customer base in Australia, and is seeing 1.26 million Australians shopping on its website each month.

Both Shein and Temu are on track with their annual sales – Shein is anticipated to reach a billion dollars in annual sales, which is set to grow now that the company has expanded into categories beyond apparel, and Temu is on track to clock $1.3 billion in annual sales, thanks to a mix of ultra-cheap prices, free delivery and aggressive marketing and media spend.

A mix of ultra-cheap prices and convenience has attracted an over-representation of young parents, larger households and retired Australians among Temu and Shein shoppers, confirms the report, detailing that 3 in 10 Temu shoppers are men, while the majority of Shein’s shoppers (80%) are women.

“Shein and Temu have surprised everyone, few could have predicted that a mass market for ultra cheap throw-away retail existed in Australia. Certainly, cost of living pressures have fueled both Shein and Temu’s stunning rise as Australians look to get more for their dollars,” said Roy Morgan’s Chief Executive Officer Michele Levine (pictured below).

“But it remains to be seen whether Temu will really stick – the current numbers indicate that a lot of people are trialing the platform, so we’ll see if that holds over 2024 as customers assess the quality of products that arrive at their door.”

The report goes on to confirm that it is not only discount stores facing pressure from these platforms and that the home of brands, Australian department stores, are also under threat as their shoppers redirect part of their spending to Temu and Shein to get more for their money in a tight economic environment.

David Jones shoppers are almost twice as likely as the average Australian to shop at Temu, while Myer shoppers are 67% more likely, it points out.

With regard to Shein, the report conveys that David Jones shoppers are almost three times more likely as the average Australian to shop on Shein, while Myer shoppers are twice as likely.

However, Levin says the longevity of these platforms is unknown, especially Temu.

“As we wait to see how Temus aggressive loss-making customer acquisition strategy, driven by huge digital search spend and free-delivery, unfolds.”

Roy Morgan interviews a representative cross-section of over 65,000 Australians each year to obtain a fully rounded understanding of the lifestyles, attitudes, media consumption habits and other key factors that drive purchasing decisions. The company also interviews tens of thousands of Australians which helps to understand the scope of internet only retail businesses like Shein and Temu, which has informed this report.


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