The forecast for Shein and Temu indicates a significant drop in growth rates next year.
- Research by Forrester predicts a decline despite aggressive digital marketing.
- Issues around product quality and ethical practices are affecting both brands.
- Shein struggles with its London IPO, and Temu faces high customer acquisition costs.
- Environmental concerns and nationalism are impacting their expansion.
Recent analysis by Forrester highlights anticipated slowdowns in the growth rates of Shein and Temu by 2025. This forecast arises despite their continued investment in digital advertising and significant promotions. Such a trend suggests that the effectiveness of these strategies may be dwindling.
Shein and Temu have rapidly expanded their presence, yet they are increasingly scrutinised for product quality and ethical production methods. These issues have attracted the attention of environmental groups and regulatory bodies, leading to amplified pressure on the companies.
Aside from ethical concerns, Shein’s progress is hindered by its pending status on the London IPO. Meanwhile, Temu grapples with high customer acquisition costs, which threaten its economic sustainability. PDD, the parent company of Temu, has publicly acknowledged the unsustainability of its current high revenue growth rates.
The company’s recent financial results showcase Shein’s successful overtaking of Boohoo in the UK, doubling profits with nearly a 40% increase in sales. However, this success is overshadowed by PDD’s substantial market value decline exceeding £41 billion in August due to Temu’s missed sales targets.
The combination of these challenges predicts a turbulent future for Shein and Temu in 2025.
