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Report: Shein or Temu Could Benefit From Merger With Wayfair

Wayfair

Shein or Temu reportedly could be potential merger partners for Wayfair.

Either of the two Chinese-founded eCommerce companies could be a good fit for a merger with the Boston-based home goods retailer, Seeking Alpha reported Friday (Dec. 29), citing a paywalled list of 2024 predictions by The Information.

This speculation comes as Wayfair has seen a loss of active customers and an 82% drop in share price over the last three years, according to the report.

For Shein or Temu, a merger with the company could help them move away from their “bargain basement” reputation, better compete with Amazon, and improve their image among U.S. consumers at a time when the two companies are facing regulatory scrutiny, the report said.

In addition, for Shein, such a merger would give it access to Wayfair’s warehouses and fulfillment centers and boost Shein’s efforts to streamline its distribution in the United States, per the report.

Temu’s parent company, PDD Holdings, has a market cap of about $191 billion while Shein has a market cap of $66 billion, according to the report.

Wayfair cut 10% of its global workforce — about 1,750 employees — in January in what it said was part of an effort to reduce the layers of management and make the company more agile.

Two months earlier, in November 2022, Wayfair said it was working to reduce costs by a half-billion dollars, as well as grow, after a quarter in which its revenue, active customers and orders dropped.

Among the steps the company was taking at the time were improving wholesale economics, logistics efficiencies, merchandising gains and higher-mix supplier services.

Shein said in June that it plans to enhance its market presence in Europe and Mexico while expanding its offering of locally manufactured products.

During the same month, Shein expanded its third-party marketplace to include home appliances and smart home products.

Temu launched as an online shopping site in the United States in September 2022, selling clothing, pet supplies, home and garden, and other product categories. The launch of Temu marked the first major overseas expansion by the Chinese eCommerce company Pinduoduo.