Americans are in love with Chinese retailers, but privacy policies and concerns could slow the momentum.
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Several Chinese retailers have made deep inroads with U.S. consumers in recent years. Cheap products and upbeat digital marketing have helped brands like Shein, Temu, and TikTok Shop thrive.
Shein generated $2 billion of profits in 2023, while the success of Temu has helped the creator Colin Huang became one of the richest men in China. Securities in PDD portfolioTemu’s parent company, said it made about $35 billion in revenue in 2023, a 90% increase from 2022. It’s unclear exactly how much TikTok Shop has generated since its launch in 2023, but the company said in its 2024 economic report that the app generated $15. billion dollars in revenue for small businesses in the United States. A Financial Times report from March, citing three sources, indicated that TikTok Shop generated $16 billion in sales in the United States.
Americans are seduced by these brands, but obstacles await them in 2025.
TikTok, for example, could be banned in the United States before the end of January. Congress passed a law in April that gave ByteDance, the Chinese company that owns TikTok, a Jan. 19 deadline to divest the app or remove it from U.S. app stores, citing security concerns. TikTok asked the Supreme Court of the United States to block the law, arguing that it violates the First Amendment rights of Americans who use the app. President-elect Donald Trump has suggested he opposes it. the ban, but it’s unclear what steps it would take.
The report said that Shein and Temu, meanwhile, faced concerns over data privacy, product safety and copyright infringement. At some point, Temu and Shein sued each other. Shein’s parent company, Roadget Business Pte., Ltd., filed a lawsuit against Temu in 2023, accusing him of creating fake Twitter accounts using Shein’s name and trademark. Temu then sued Shen, claiming the fast fashion company violated antitrust laws.
A Shein spokesperson told BI that it “has robust data security policies and practices that meet industry standards, and we are committed to collecting and using only the minimum amount data needed to execute commands. SHEIN stores US customer data within Microsoft in the United States. Azure cloud-based solution and within AWS US-based cloud-based solution.
The spokesperson said Shein “takes product safety very seriously and is committed to providing customers with safe and reliable products.”
These e-commerce stores also have to compete major retailers in the United Stateslike Amazon, which launched its own Temu-like discount window called Haul in November.
Despite the obstacles, EMERKETER says the TikTok store will continue to grow, Shein’s supply chain model will become more popular, and Temu may expand its offering to low-cost groceries.