Chinese firms Shein, Temu and TikTok Shop employ algorithms to grow their brands rapidly without depending on traditional manufacturers, posing potential long-term challenges for Amazon, experts say.
is worried about competition from China , it only has itself to blame. In 2013, Amazon introduced its third-party marketplace platform to Chinese manufacturers. Unwittingly, it showed them what it takes to challenge Amazon itself.
Shein’s platform has two faces. One face looks towards consumers in the world beyond China, using deep skill in digital marketing to place temptingin front of target customers on social media sites, through its own website and on mobile apps. It also uses email, influencer and broadcast marketing to reach consumers beyond China.
Between July and December 2021, Shein used this sensitivity to tastes to induce its network of factories to add 2000 to 10,000 stockkeeping units per day to its app. Only through this tight integration can it persuade its factories to work exclusively with Shein rather than leak designs to competing platforms.. It is a subsidiary of PDD Holdings, a multinational commerce group with extensive experience managing supply chains.
China used to lag behind Japan and South Korea in consumer brand building. Many thought that China might lack the sensitivity to Western cultural nuance that Japan and South Korea had mastered. Though financial disclosures by all three Chinese companies are limited, it is unlikely that their combined global merchandise value is much beyond 12 per cent of Amazon’s. Temu’s gross merchandise value is not officially disclosed, but it is estimated at US$15 billion by extrapolation from a Statista plot of recent growth.
Shein and Temu often take two weeks to fulfil an order but their lower prices compensate for the longer wait. If Shein, Temu and TikTok Shop can grow their businesses, they can introduce new supply chain efficiencies, such as local warehousing. Shein is already offering its design and marketing services to suppliers beyond China.Amazon is not ignoring the three Chinese platforms.
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