E-commerce wars: Could Temu overtake fast fashion giant Shein?

Can Temu take Shein's fast fashion crown?
Can Temu take Shein's fast fashion crown? Copyright Future Publishing/CFOTO/Getty
By Saskia O'Donoghue
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Shein, the e-commerce behemoth, says the company reached record profit results in the first half of 2023. But could rival Temu take their place as the top fast fashion retailer?

Controversial fast fashion brand Shein says they have reached record profit results in the first half of 2023, citing growth driven by the US market.


“We recorded the highest first-half net profit in the company’s history, compared to a near break-even during the same period in 2022,” Shein’s executive vice chairman Donald Tang wrote in a memo to investors, obtained by CNBC, adding, “In particular, our continued momentum in the US reinforces our leading position in the market.”

The Chinese e-commerce giant is known for its rock bottom prices and targeted campaigning to Gen Z who share hauls on social media platforms including the wildly popular TikTok.

After 15 years in business, Shein remains one of the most popular fast fashion online retailersYUICHI YAMAZAKI/AFP via Getty Images

Shein targeting Europe

In 2022, Shein posted a staggering $22.7 billion - or €20 billion - in sales profits of over $700 million (around €637 million).

With a target of $60 billion (€54 billion) in revenues by 2025, the retailer has been making moves to reposition itself as a fashion and lifestyle online platform.

The aim is to compete with the likes of Amazon and Walmart in the US and, earlier this year, Shein started rolling out marketplaces selling goods from local vendors alongside their own products in North America, Brazil and Mexico.

Richard Drew/AP
Shein has become infamous for its rock bottom pricesRichard Drew/AP

It’s set to expand that model to Europe too, starting out in Germany, Spain, France and Italy.

“We are continuing to expand the product categories on our marketplace beyond fashion and apparel to other categories, including home appliances and other home products,” Tang revealed in the memo.

Shein has long been criticised over poor labour rights, greenwashing and copyright infringement.

Just last week, Swedish retailer H&M sued Shein for copyright infringement and the fast fashion brand remains locked in a contentious legal battle with Chinese rival Temu, with the two companies suing each other.

Richard Drew/AP
E-commerce rivals: Pages from the Shein website, left, and from the Temu site, rightRichard Drew/AP

A war at the top of e-commerce?

Last month, Temu sued Shein in the US, alleging the company violated antitrust laws, claiming they had strong-armed suppliers into exclusivity agreements, forcing Temu to pull 10,000 products from their site.

Back in March, Shein sued Temu in Illinois for copyright and trademark infringement. They also alleged that Temu scripted “false and deceptive statements” given to social media influencers when promoting the brand.


Shein claimed Temu gave influencers social media guidelines that contained statements including, “Shein is not the only cheap option for clothing! Check Temu.com out, cheaper and way better quality” and “Looking for clothes better than Shein but cheaper than Revolve? Check Temu.com out”.

Temu have made millions offering products for incredibly cheap pricesFLORENCE LO/REUTERS

While the bitter war between the two retailers looks set to continue, Temu is, quite literally, taking over the internet.

Launched less than a year ago, in September 2022, the platform now boasts the top spot in the free free shopping app category in both Apple's App Store and Google's Play Store.

It’s beating out e-commerce giants like Amazon and has easily overtaken Shein.

If you google anything fashion related, the ‘shopping’ tab results will be bursting with links to Temu’s products, suggesting their SEO investment is unmatched on the internet.

Temu claims its website features quality products at competitive pricesTemu/AP

Where has the online shopping megastore come from?

Like rival Shein, part of Temu’s business model sees products frequently replaced with new designs according to demand.

Owned by the e-commerce mammoth, it has fought tooth and nail to get to the top of the market, even paying millions for an advert during February’s Super Bowl.

It’s rare for a Chinese firm to buy ad space at the Super Bowl, but its attempts to crack the US market worked. During the first and third quarters of the game between the Philadelphia Eagles and the Kansas City Chiefs, Temu broadcasted a video based on its slightly ironic tagline ‘Shop Like A Billionaire’.

Following a woman apparently amazed by the cheap prices of clothing and accessories on the website, the advert was accompanied by a jingle: “The prices blow my mind. I feel so rich. I feel like a billionaire. I’m shopping like a billionaire”.

Temu’s tactic from the start has been to focus on lower-income consumers by offering heavily discounted products.


Its estimated worth is now upwards of $100 billion (approx. €91 billion) and ships to more 15 markets worldwide as well as the US, including the UK, Canada, Mexico, France, Germany, Australia and New Zealand.

Temu has targeted the chronically online in its staggering marketing campaignAP/Temu

How are Temu’s products so cheap?

With clothing costing little more than pocket change, it’s not surprising to learn that it’s estimated consumers spent 20 percent more on Temu’s produce than those sold by Shein in May this year.

They’re well known for undercutting rivals like Shein and Wish and also offer free shipping and returns, giving the illusion of lower overall costs.

Shein is also known primarily as a fashion retailer, while Temu has cornered the market as a low-cost Amazon, selling products from a wider variety of categories.

Fans report the quality of the pieces on offer are of slightly higher quality than their rivals, giving Temu an edge over the competition.

Riccardo Milani/Reuters/Hans Lucas
A French version of the Temu app offering a 'mega sale'Riccardo Milani/Reuters/Hans Lucas

Their ability to keep costs so low reportedly lies with their model of connecting consumers directly with suppliers, only taking responsibility for the shipping process.

As a result, operation costs and product prices can stay low, especially considering the inexpensive manufacturing and labour costs in China.

Why is Temu already controversial?

Since its launch, Temu has faced criticism over apparent pressure it puts on its suppliers.

In China, it has been reported that small manufacturers are being urged to cut prices to levels that make it near impossible to turn any sort of profit.

There are fears this practice could lead to unethical business practices, forcing pay cuts and long working hours in order to keep businesses afloat.

Getty/Jakub Porzycki/NurPhoto
Temu tries to woo customers with the tagline 'Shop Like a Billionaire'Getty/Jakub Porzycki/NurPhoto

Temu also has few formal affiliations with major brands, instead plumping to sell imitation products, like knock-off Lego sets or rip-offs of high street fashion, which have raised concerns about copyright infringement and quality control.

It was given a C-minus grade by the Better Business Bureau (BBB) amid complaints from customers, many who say the supposedly bargain prices are, in fact, too good to be true.

Some say their orders never arrive or are of poor quality.

On TikTok, reviews tend to fall into one of two categories: entirely negative or full of praise. Critics have noticed that the positive reviews often feature discount codes or affiliate links for Temu, suggesting the video creators are either being paid or getting a discount to promote the company.

@cleaningwithdanielled Okay i am obsessed with Temu ? use code dke9335 ?in bio. ad #temu#temufinds#haul♬ BEST INTEREST - Tyler, The Creator

However, while a large chunk of customers have called the company a scam, the BBB has not designated it as such - or as an unsafe company.

Despite mixed reviews, it seems as though Temu is here to stay. That’s certainly down to sheer persistence and throwing money at the venture; the company is a huge presence on social media platforms and purchased an enormous 8,900 ads across Meta platforms in January 2023 alone.

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