Fast fashion giant Shein’s throne has been challenged by a rival with one of America’s hottest apps

BEIJING — It took Shein a decade to catch up with Inditex Zara as the world’s biggest fast-fashion retailer. Now, a new online upstart is looking to topple Shein, in at least one measure, within a year.

Temu, the shopping platform owned by Chinese e-commerce heavyweight PDD Holdings, last month set a lofty sales goal for its North American store: report at least one day of gross merchandise value (GMV) that exceeds Shein’s between now and September. 1 to mark the anniversary of its entry into the U.S. market, according to people familiar with the matter.

This is the first step in Temu’s wider plans to dominate the online shopping landscape. The company sees Shein as its biggest rival in the near term and wants to surpass its dominance in the next few years, the people said. But the company, which sells everything from clothes to kitchenware, is ultimately looking to take on global behemoths Amazon.com and eBay, they added.

Temu’s growth is already taking off and has been one of the top-ranked apps in the US for months. According to data analytics firm YipitData, the company had a GMV of about US$500 million (S$673 million) in the first five months of operations in the US. According to the data, sales in January alone amounted to almost 200 million USD. Temu launched in Canada, its second market, in February.

Comparative data on Shein’s finances is hard to come by, but the scant details that have come to light indicate that the rapid expansion of Temu’s cause is accelerating.

According to YipitData, Shein already dominates the US fast fashion market, far outstripping rivals Zara and H&M. The Financial Times reported last month that Shein predicted global GMV would grow to $80.6 billion in 2025, a 174 percent increase from last year. According to the report, revenue could grow to $58.5 billion in 2025, up from $22.7 billion last year.

Temu’s regular employees were not given a daily sales target – a number closely held among senior management. Instead, they were told to shift from growing users of their app and website to developing ways to increase customer spending.

Shein’s rapid success has paved the way for a slew of newcomers looking to enter the burgeoning e-commerce market, but Temu is widely seen as the most serious competitor. The latter is already headhunting Shein employees and targeting suppliers, while leveraging the deep pockets, extensive supply chains and expertise of parent PDD, which controls roughly 13 percent of China’s online retail, — especially in consumer data that allows it to quickly change offerings. Through the Pinduoduo platform.

While both companies are synonymous with cheap, easy-to-find products, Temu operates more like a marketplace than a stand-alone brand like Shein. It doesn’t deal with design and manufacturing, instead recruiting suppliers to offer a list of products from which Temu selects and then allows you to open a store on its platform. After sellers send products to Temu’s warehouses in China, the company handles shipping, marketing and promotion, and after-sales services.

Temu is betting that a massive marketing campaign will drive sales growth. The company debuted Super Bowl advertising in mid-February, with two 30-second spots — which typically cost millions of dollars to produce and air — featuring a fashionable customer twirling and dancing in an array of outfits. It also implements social marketing practices similar to Pinduoduo’s strategies in China, including offering discounts, cash rewards and gifts to customers who refer their friends.

The strategy is paying off, in January the website’s traffic surpassed Shein’s. If Temu can maintain its momentum, it will also join some Chinese-owned Internet services that have been successful in the United States, including Alibaba’s Aliexpress and ByteDance’s TikTok. BLOOMBERG