Both Shein and Temu are anticipated to experience notable drops in growth by next year according to a recent Forrester report.
- Despite aggressive digital advertising strategies, both companies are projected to face a significant decline in growth.
- Challenges such as quality complaints, unethical production, and increased nationalism contribute to these declining forecasts.
- Shein is yet to secure its planned London IPO, heightening concerns around its future expansion.
- Temu reports unsustainable revenue growth, compounding its struggle with high customer acquisition costs.
Recent market analysis from Forrester has revealed that Shein and Temu are set to see their growth rates plummet in 2025. Despite their current status as ecommerce powerhouses, their future expansion is at risk. This decline is expected despite what has been described as their ‘relentless’ focus on digital advertising and high-profile marketing efforts.
The report identifies several contributing factors to the predicted downturn. Complaints regarding the quality of goods and unethical production processes have painted these companies as targets for environmental and governmental scrutiny. Additionally, increased nationalism within key markets is also cited as a contributing factor.
Currently, Shein’s expansion strategies are hindered by its failure to secure a crucial London IPO. This financial roadblock raises questions about its capability to continue expanding at the previously observed rate, despite a recent surge in profits and sales.
On the other hand, Temu faces its own set of hurdles. PDD, the owner of Temu, has openly stated that the recent high revenue growth is unsustainable. This is paired with the reality of very high customer acquisition costs which challenge long-term profitability. PDD’s value drop by over £41 billion in August, following missed sales targets, underscores this concerning trend.
These insights underscore the considerable challenges Shein and Temu face as they navigate a complex global retail landscape.
