Ultra-cheap fast-fashion giants Shein and Temu are expected to capture a bigger chunk of Christmas spending this year as more Australians look to celebrate and decorate their homes on a budget.
While shoppers may not be looking to purchase Christmas gifts from the discount e-commerce juggernauts, Roy Morgan consumer trends expert Laura Demasi pointed out that Shein and Temu – estimated to drive a combined $2 billion in annual sales – have had a 30 per cent jump in monthly customers at a time when many retailers have been hit hard by reduced consumer spending.
Retail experts expect many Australians will go online to Shein and Temu rather than braving the shops.Credit: Dominic Lorrimer
“There’s all that other spending that happens over the period – buying clothes for yourself, household goods, decorations, all that stuff that we buy in excess over the peak season to support all the stuff we’re going to do over that six- to eight-week period,” Demasi said at an industry roundtable hosted by the Australian Retailers Association.
“I think a lot of that is going to be transacted through Shein and Temu.”
Australians will spend close to $70 billion in the six-week lead-up to Christmas – a 2.2 per cent increase on last year, Roy Morgan estimates. A record $6.7 billion is projected to be spent during the Black Friday and Cyber Monday sales alone – 5.5 per cent more than last year. The sales event has been building more momentum every year and has become bigger than the Boxing Day sales.
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More than 3.8 million Australians shopped on Temu at least once in the past 12 months, according to Roy Morgan data. About 2 million Australians did the same on Shein. Most of these shoppers are repeat, high-frequency customers.
Temu offers a broad range of products, from household goods and power tools to novelty items, at very low prices, while Shein is predominantly a fast-fashion retailer that recently hit $1 billion in sales and tripled profits in Australia. Both have come under fire for poor labour conditions in factories and overproduction of poor-quality products.
Demasi said retailers had underestimated Shein and Temu’s impact on the local market and were in denial.