According to new data, the growth rates of Shein and Temu are expected to decline in the coming year.
A study conducted by Forrester, a research and advisory firm, examined retail projections for 2025 and found that both e-commerce leaders would experience a significant decrease in growth rates. This forecast persists despite their ongoing investments in aggressive digital advertising campaigns and prominent marketing initiatives, as reported by Retail Week.
The report indicated that even though Shein and Temu have been expanding rapidly, issues such as “complaints regarding product quality, unethical manufacturing methods, unfair shipping advantages, and rising nationalism” have positioned them as targets for environmental advocates and government scrutiny.
The report also pointed out that Shein has yet to finalize its IPO in London, while Temu faces high costs associated with acquiring customers, contributing to the projection of diminished growth rates.
In its latest earnings report, the parent company of Temu, PDD, acknowledged that its “high revenue growth is not sustainable.”
This analysis follows Shein’s recent success, having surpassed Boohoo in the UK, with profits that have doubled and sales that surged nearly 40%.
On the other hand, PDD’s valuation plummeted by more than £41 billion in August after Temu fell short of its sales expectations.
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