China’s Temu steals 17% of US market share, cuts jobs from US Amazon and decimates small businesses
As inflation rises, U.S. consumers are increasingly turning to Chinese e-commerce platform Temu for their shopping needs. Temu, with its appealing tagline “Shop Like a Billionaire,” has captured 17% of the U.S. market share, surpassing traditional rivals such as Amazon.com Inc., Dollar Tree Inc. and Five Below Inc. It poses a challenge for U.S. retailers. The lucrative and destructive 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 deep discounts on products compared to Amazon’s prices. When combined with Temu discount codes, consumers can enjoy even greater savings.
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Temu is even the No. 1 shopping app on Apple’s App Store, ahead of Amazon, Target Corp., and Walmart Inc., which currently hold the 3rd, 4th, and 8th positions, respectively. The second-ranked shopping app is Shein, another Chinese retailer.
Orders purchased on Temu are shipped from China and are expected to be delivered within 10 days. But to compete with Amazon’s fast delivery, Temu opened its marketplace to U.S. warehouses last month. Shopping from these sellers significantly reduces shipping times and allows U.S. retailers to handle fulfillment and shipping directly.
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In December, Reuters reported that Tem had successfully taken on dollar stores like Dollar Tree and Dollar General Corp., with nearly 17% of the U.S. market share. That compares with 8% for Five Below, 43% for Dollar General and 28% for Dollar Tree, according to data analysis firm Earnest Analytics.
In January, Amazon announced it would lay off 5% of its Buy with Prime employees, which provide fulfillment and delivery services to retailers.
“Following our recent review, we have made the difficult decision to eliminate a small number of roles from our Buy with Prime team. Buy with Prime is a top priority for Amazon, and with strong adoption from sellers and positive feedback from customers, we are a top priority for Amazon. “We continue to invest significant resources into Buy with Prime to build on that momentum,” Amazon said in a statement.
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The ripple effect also extended to discount stores like Dollar Tree and 99 Cents Only Store, both of which announced significant store closures and employee layoffs.
Citing changing consumer demand and economic challenges, 99 Cents Only Stores will close all 371 stores in Arizona, California, Nevada and Texas. Dollar Tree plans to close 1,000 stores across Dollar Tree and Family Dollar stores.
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The article China’s Temu Takes 17% of US Market Share, Cuts Jobs from Amazon in the US, Devastating Small Businesses originally appeared on Benzinga.com.
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