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Forecasted Slowdown in Shein and Temu Growth Rates by 2025, According to Analyst

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Forecasted Slowdown in Shein and Temu Growth Rates by 2025, According to Analyst

Recent data indicates that the growth trajectories of Shein and Temu are anticipated to slow down over the next year.

A study from Forrester, a research and consulting organization, analyzed retail forecasts for 2025 and concluded that both e-commerce giants are likely to face a notable decrease in their growth rates. This prediction holds firm despite their continued investment in aggressive digital marketing strategies and high-profile promotional campaigns, as detailed by Retail Week.

The report suggested that, although Shein and Temu have been rapidly scaling, factors such as “concerns about product quality, unethical production practices, preferential shipping treatment, and increasing nationalism” have rendered them targets for advocates of environmental causes and regulatory bodies.

Additionally, the report highlighted that Shein has not yet completed its IPO in London, whereas Temu is struggling with elevated customer acquisition costs, further fueling the expectations of reduced growth rates.

In its most recent earnings statement, PDD, the parent company of Temu, admitted that its “high revenue growth is not sustainable.”

This analysis comes on the heels of Shein’s recent achievements, having eclipsed Boohoo in the UK, with profits doubling and sales increasing nearly 40%.

Conversely, PDD’s valuation experienced a significant drop of over £41 billion in August after Temu failed to meet its sales targets.

Image Source: Paulm1993 / Shutterstock

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