How Shein and Temu Snuck Up on Amazon

Louise Matsakis, Big Technology:

Shein and Temu’s users aren’t just browsing. Shein reportedly earned roughly $45 billion last year, and is currently trying to go public. PDD Holdings, Temu’s Chinese parent company, reported earlier this week that its revenue surged more than 130% in the first quarter. PDD is now the most valuable e-commerce company in China.

The two startups are sending so many orders from China to the US that it’s causing air cargo rates to spike, and USPS workers have said publicly that they are overwhelmed by the sheer volume of Temu’s signature bright orange packages they have to deliver. “I’m tired of this Temu shit, ya’ll killing me,” one mailman said in a TikTok video last year with over two million likes. “Everyday it’s Temu, Temu, Temu — I’m Temu tired.”

You might recognize how both Shein and Temu grew using the same tactic as TikTok: relentless advertising. (Which is something Snap CEO Evan Spiegel complained about despite TikTok’s huge spending on Snapchat.)

Both these companies are an aggressive distillation of plentiful supply and low cost to buyers. For people with lower incomes or who are economically stressed, the extreme affordability they offer can be a lifeline. Not everybody who shops with either fits that description; Matsakis cites a UBS report finding an average Shein customer earns $65,000 per year and spends more than $100 per month on clothes. But there are surely plenty of people who shop on both sites — and Amazon — because they simply cannot afford to buy anywhere else.

Every time I think about these retailers, I cannot shake a pervasive sadness. Saddened by how some people in rich countries have been compromised so much they rely on stores they may have moral qualms with. Saddened by the ripple effect of exploitation. Saddened by the environmental cost of producing, shipping, and disposing of these often brittle products — a wasteful exercise for many customers who can afford longer-lasting goods, and the many people who cannot.

Derek Guy has written about the brutality of the garment industry in the U.S., but notes how clearly different these fast and ultra-fast fashion brands are from inexpensive clothing:

Given the opacity in the supply chain, your best single measure for whether something is amiss is price. If you are paying $5 for a cut-and-sewn shirt, something bad is happening. Does this mean that every expensive shirt was ethically made? No. But you know the $5 shirt is bad.

Guy also wrote about the difference between cheap and fast fashion.

This whole industry bums me out because I try to appreciate clothing and fashion. I like finding things I like, dressing a particular way, and putting some effort into how I present myself. Yet every peek behind the curtain is a mountain of waste and abuse, and the worst offenders are companies like Shein and Temu — and, for what it is worth, AliExpress and facilitators like Amazon.