The News
Chinese e-commerce giants Shein and Temu are expected to dominate this year’s Black Friday shopping holiday.
The two companies saw sales jump in the first half of November, while shoppers spent slightly less at major US retailers compared to the same period last year, in the first decline of the kind since 2017. A few brands appeared to buck the trend: Abercrombie and Fitch, for example, and Victoria’s Secret, likely stemming from good marketing and the popularity of the underwear brand’s fashion show.
The Chinese brands are also outspending their US rivals on online marketing, buying ad space on search engines to target consumers that look up terms like “Walmart Black Friday deals” or “Kohl’s Black Friday,” Reuters reported.
SIGNALS
Shein and Temu’s prices may be too low for competitors to rival
Black Friday this year can be defined as “Shein and Temu versus the world,” The Business of Fashion wrote, adding that consumers now look to these platforms to find deals like they once did in malls. “This puts many clothing brands in a bind,” BoF wrote. “Retailers can offer deep discounts… but how effective is that going to be when Temu sells lookalikes at impossibly low prices?” An issue for retailers is that their discounts end post-Black Friday, while low-cost brands offer bargains year-round.
‘Social commerce’ is reshaping how people think about shopping
Another Chinese giant, social platform TikTok, has jumped on the trend of e-commerce through TikTok Shop, its bespoke shopping tool that is fully integrated with the short-video entertainment the app offers, allowing users to buy products without leaving the platform — advancing what marketers call “social commerce.” “We are witnessing the death of Black Friday,” a Bloomberg opinion contributor said, “not because people stopped shopping, but because they never stop shopping.” TikTok was aiming for $17.5 billion in 2024 US revenue from its e-commerce business, Bloomberg reported, which could pose a threat to online retail giants like Amazon — though there hasn’t been indication as to whether the Chinese company met the lofty goal.
Trump may be eyeing low-cost platforms like Shein and Temu for tariffs
US President-elect Donald Trump has talked at length about the tariffs he intends to impose on Chinese products once in office, and Shein and Temu could be among the companies hit, Business Insider noted. The stakes are high: Temu’s owner PDD has recently reported underwhelming revenue and profit, while Shein is preparing for a long-awaited IPO next year. The two companies have already faced regulatory scrutiny from the Biden administration, because of their practice of shipping products directly from factories in China to the US, avoiding tariffs over imports, and it’s “hard to think of any scenario” where these companies will avoid more scrutiny under Trump, given their supply chains begin in China, an economist told BI.