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Temu and Shein Struggle to Convert Visits Into Transactions 

Shein

Online retailers Temu and Shein reportedly draw millions of visitors to their websites but struggle to convert those visits to sales. 

Despite their popularity, the two retailers still lag behind market leader Amazon in terms of conversion rate, Reuters reported Wednesday (Nov. 22). 

Nine out of 10 visitors to Temu’s and Shein’s websites were window shoppers rather than buyers, the report said, citing data from Similarweb. This indicates that while the companies have successfully attracted a large audience, they have struggled to convert those visits into transactions. 

Shein’s website drew 28.6 million unique monthly visitors in October, a 7.25% increase from the previous year, according to the report. However, the conversion rate for Shein’s website visits declined from 4.6% to 4.1% compared to the previous year. 

Temu, which launched in the U.S. in September 2022, saw its website traffic leap to 42 million unique monthly visitors in October, more than four times the amount from the previous year, the report said. However, only 4.5% of these visits resulted in actual transactions. 

In comparison, Amazon trounces both Temu and Shein, with 56% of its monthly visits resulting in purchases, per the report. 

Both Temu and Shein have employed aggressive marketing strategies to attract more customers, according to the report. For example, Shein has ramped up its holiday marketing efforts in the U.S. and Europe, expanding its reach and product offerings. The company’s recent acquisition of U.K.-based online retailer Missguided has also contributed to its increased valuation of $90 billion. 

In terms of advertising spend, Shein increased its ad spend by 60% in the first two weeks of November compared to the previous year, the report said, citing data from Sensor Tower. Similarly, Temu doubled its ad spend within the same time frame. 

While Temu and Shein have made significant strides in the online retail space, they still face challenges in competing with established players, per the report. Melissa Minkow, director of retail strategy at CI&T, told Reuters that online shoppers have a higher comfort level with Amazon due to its expansive product categories, fast shipping speeds and return policies. 

As the holiday season progresses and Black Friday approaches, the competition among online retailers will intensify, the report said. To stay competitive, Shein has advised its marketplace sellers to optimize their product listings by offering competitive pricing and keeping inventory up to date. 

PYMNTS Intelligence has found that customers value easy buying experiences enabled by the latest technologies. To cater to that demand, companies are striving to enhance the customer experience by improving payments, according to “Platform Business Survey: The Rise of Embedded Payments,” a PYMNTS and Carat from Fiserv collaboration.