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How Temu sales stack up to ecommerce competitors: report

Data from Earnest Analytics found that the fast fashion company has nearly double the retention rate of companies such as Walmart and Target.

How Temu sales stack up to ecommerce competitors: report

A person orders clothing from a Temu mobile app. Temu has a higher retention rate than some of its ecommerce competitors, according to a report from Earnest Analytics. Courtesy of Temu

Dive Brief:

  • More than 28% of Temu customers return to the platform 16 months after their first purchase, giving the fast fashion company nearly double the retention rate of Walmart and Target, according to a recent report from Earnest Analytics. 
  • Temu’s “gamified shopping and heavy marketing” set it apart from lower retention from other ecommerce platforms, including Wish and Etsy, per the report. However, Temu’s retention rate was around half of Amazon’s.
  • Around 18% of U.S. households have shopped on Temu, according to Earnest credit card data. “Nevertheless, Temu has yet to make meaningful inroads with the largest online brands,” per the report.

Dive Insight:

From January 2023 to 2024, Temu’s sales grew 840%, per the report. Sales topped 1100% during the holiday 2023 season, according to Earnest, which gathers its data from credit card transactions.

Between September 2022 and January of this year, Earnest said Temu grew to 1% marketplace share in online retail. For comparison, the report said Amazon has nearly 80% market share.

“Temu remains a small player in terms of total online gross merchandise value (GMV) sold, but is already having a meaningful impact on several other brands,” the report stated.

In general, the report says Temu has had minimal impact on Walmart and Amazon, despite sharing nearly all of its customers with the retail giants. In addition, more than 96% of Temu users also shop at Walmart and Amazon, and more than 84% of them shop at Target. Temu has had the biggest disruption on online discounters, which Earnest names as Wish and AliExpress.

The analytics firm argued that Temu’s gamified shopping, deep discounts and marketing strategy pushed the relatively young company into the orbit of fast fashion rival Shein. In Temu’s first three months (beginning in September 2022), it had half as many active users in the U.S. as Shein. However, it surpassed Shein’s sales in 10 months.

In addition to competing in the marketplace, Shein and Temu have also been involved in court battles. Though two lawsuits the companies filed against each other were mutually dropped, Temu sued Shein in December 2023, accusing it of “mafia-style intimidation,” and other tactics allegedly meant to thwart Temu’s success. That case is ongoing, though earlier this month attorneys for Shein asked the court to dismiss the case.

The Earnest report found that Temu’s multiple ads during the 2024 Super Bowl didn’t meaningfully boost sales to new or existing customers, and there was a deceleration in sales growth from existing customers, per the report. 

Temu has faced legal challenges since its launch. Temu is facing two separate class action lawsuits, which allege that the fast fashion company failed to secure customer personal and financial data and that it intentionally loads malware and spyware to users’ devices, among other claims.