E-Commerce

Shein, Temu, and Amazon court suppliers as competition heats up

E-commerce giants are investing in their supplier networks as a global battle for market share gets underway.
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As competition between Amazon, Shein, and Temu heats up, the e-commerce giants are fortifying their supplier networks across the globe.

The latest example of this came on Wednesday, with Shein’s announcement that it plans to invest $70 million into its third-party manufacturing suppliers over a five-year period. The company said the program is aimed at funding “facility enhancements, technology advancements, training and upskilling, and services for the community.”

  • This includes training sessions on the latest garment technology, the launch of an innovation hub for researching best practices in manufacturing, and the opening of childcare centers for workers’ families.

Shein’s suppliers have long been a source of criticism, with some alleging that they have engaged in forced labor, unsafe working conditions, and using hazardous chemicals in products. But this recent investment comes as Shein faces competitive pressure from rivals both on its home turf and abroad.

China-based Temu, for example, is reportedly taking on Chinese sellers that Shein dropped because they did not meet its standards for factory size, per a Financial times report.

In addition, Amazon in December announced plans to launch an “innovation center” near Shenzhen, China, historically the hub of Shein’s supplier network. The American competitor also recently cut its fees for third-party sellers, including reducing referral fees for apparel products priced under $15 from 17% to 5%.

Of course, Amazon is feeling the competitive pressure itself. Thousands of Amazon sellers have joined Shein’s marketplace, according to research from Marketplace Pulse, since Shein has started taking strides to expand its supplier network beyond China and into the US.

In the meantime, the rise of Temu in the US has inspired its own share of hand-wringing over whether the Chinese upstart will claw market share away from Amazon. According to data from Earnest Analytics shared with Reuters, Temu accounted for 17% of market share in the discount store category as of December—and since then, it notably ran a Super Bowl ad.

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.