With inflation rising, American consumers are increasingly turning to Chinese e-commerce platform Temu for their purchases. With its enticing slogan, “Shop like a billionaire,” Temu has captured 17% of the U.S. market share, posing a challenge to traditional American retailers such as Amazon.com Inc., Dollar Tree Inc. and Five Below Inc. The surge underscores the lucrative and disruptive nature of startups.
Owned and operated by PDD Holdings Inc. (NASDAQ:PDD), Temu offers a wide range of products including home decor, pet supplies, beauty and health products, and clothing. The platform is known for its competitive pricing and often offers significant discounts on items compared to prices on Amazon. When combined with Temu discount codes, consumers can save even more.
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Temu has even become the No. 1 shopping app in Apple’s App Store, surpassing Amazon, Target Corp. and Walmart Inc., which currently rank third, fourth and eighth, respectively. The No. 2 shopping app is Shein, another Chinese retailer.
Orders purchased from Temu are shipped from China and are expected to be delivered within 10 days. However, to compete with Amazon’s fast delivery, Temu opened its marketplace to US warehouses last month. Purchasing from these sellers can significantly reduce delivery time, allowing US retailers to handle fulfillment and shipping directly.
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In December, Reuters reported that Temu was successfully winning over U.S. dollar stores such as Dollar Tree and Dollar General Corp. which account for nearly 17% of the market share in the United States. According to data analytics firm Earnest Analytics, that figure is 8% for Five Below, 43% for Dollar General and 28% for Dollar Tree.
In January, Amazon announced it would lay off 5% of its Buy with Prime workforce, which provides fulfillment and delivery services to retailers.
“Following a recent review, we have made the difficult decision to eliminate a small number of roles within our Buy with Prime team. “Buy with Prime is a top priority for Amazon, with strong adoption among merchants and positive feedback from customers and we will continue to invest significant resources in Buy with Prime to build on this momentum,” Amazon said in a statement.
The impact also extends to discount retailers such as Dollar Tree and 99 Cents Only Stores, both of which have announced significant closures and employee layoffs.
Citing changing consumer demand and economic challenges, 99 Cents Only Stores is closing all 371 locations in Arizona, California, Nevada and Texas. Dollar Tree plans to close 1,000 locations at its Dollar Tree and Family Dollar stores.
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This article, “China’s Temu Takes 17% of U.S. Market Share, Eliminates Amazon Jobs in America and Decimates Small Businesses” originally appeared on Benzinga.com
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