Temu vs. Shein: Are they the same company? Are you intrigued by the similarities between Temu and Shein and wonder if perhaps are the same company or are they rivals? To answer all these questions I gathered expert advice and further in this post I will reveal much more than the initial questions. So take 5 minutes to read this review because is best to be informed rather than being scammed.
If you have never heard about Shein and Temu, congratulations! You somehow managed to live completely off the grid for the past couple of years. The rest of us have been bombarded with endless ads, “ruthless reviews,” and “deals of the century” from the two most famous e-commerce platforms.
Ask anyone on the street today what Shein or Temu is, and they will probably answer the same thing: “It is a Chinese site with ridiculously cute stuff and very low prices. Yes, you are most likely to get the same answer for both of them.
So, does it mean that Shein and Temu are technically the same thing? After all, they seem to sell the same things at the same prices; both come from China and have suspiciously similar marketing strategies. Or are we witnessing the most fierce confrontation of brands since the epic “soda war” here?
We have collected a lot of dots and are now ready to answer these and many other questions about Temu and Shein, their common DNA, and their differences. And believe me, the answer is not what you think! Now, without further ado, let`s dive into the origin and nature of Shein and Temu and see whether they are actually the same company.
Why do we love Chinese online shops so much?
For some, it is a guilty pleasure; for others, it is a great way to save some money on essentials. There are people who have built their successful blogging careers on our fascination with Chinese online shops like Shein and Temu.
Yes, we love them, and let’s admit, we all shop there despite all the negative reviews, suspicious origins of some products, and endless videos from concerned YouTube experts about how Temu encourages overconsumption, and Shein is probably using sweatshops and child labor.
So, what is the phenomenon of Chinese online shops? Answering this question will probably help us understand why Shein and Temu eventually became the flagships of today’s e-commerce industry in the USA and Europe.
In fact, there are several reasons why Chinese retailers have become so attractive to Western consumers in the past few years. Some of them are obvious; others may surprise you and still remain decisive factors as to why even such giants as Amazon start getting nervous when Temu or Shein enter the room.
- Affordability: Witnessing an unprecedented inflation rate, we all have to get budget-conscious today. But at the same time, humanity has been establishing the cult of consumption and polishing marketing strategies for far too long to simply give up on the urge to spoil ourselves with another trinket and “keep up with the Kardashians. That is why the affordability of products from Temu, Shein, and other Chinese retailers will always remain a key factor in their success. It appeals to a wide range of consumers, including budget-conscious shoppers, anxious millennials, and young adults who may not have large disposable incomes.
- Wide Variety: Temu and Shein are famous for their vast and diverse selection of clothing and accessories, catering to different styles, sizes, and preferences. It allows customers to find items that suit their individual tastes and fashion needs, easily keep up with microtrends, and fit into any aesthetic, finding everything they need in one place.
- Accessibility: There is nothing more upsetting than finding the perfect dress or purse and then realizing that the website does not ship to your location! With marketplaces like Temu and Shein and their worldwide shipping, people forgot about this problem as well. It seems like they would gladly deliver your prom dress to the South Pole!
- Social media marketing and online presence: Chinese retailers reinvented digital marketing and took over all social media platforms, collaborating with all sorts of influencers and trendsetters to make sure that you see their ads or hear about another promo at least 10 times before your morning coffee.
- User-Friendly Website and App: Both Shein and Temu offer user-friendly and visually appealing websites and mobile apps. The shopping experience with them is designed to be convenient and seamless, which encourages customers to browse and make purchases.
- Frequent Sales and Discounts: Chinese retailers are particularly famous for their sales, promotions, and discount events. These offers attract budget-conscious shoppers and create a sense of urgency, encouraging customers to make purchases.
Those are only some reasons people got hooked on Shein, Temu, and such and will keep buying from those retailers despite all the environmental and ethical concerns, no matter how many exposing videos YouTubers release. But since Temu and Shein have so much in common, does it prove that they come from the same mothership? Let`s see.
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Let`s talk business
To understand the similarities and differences between Temu and Shein, we need to figure out how online retailers work in general. Technically, there are three business models for online sellers today. Whether you are selling handmade socks through Etsy or have an international e-commerce platform, you will probably work according to one of these three scenarios:
- 1P: First-party relationship: You buy products wholesale from a manufacturer, put your labels on them, and handle the whole selling process from marketing to shipping;
- 2P: Two-party relationship: You let a seller use your e-commerce platform to showcase their products but deal with the marketing, shipping, and logistics yourself, taking a percentage from every sale;
- 3P: Third-party sales: You welcome an independent seller on your e-commerce platform and let them handle all the logistics, taking a percentage from a sale or a certain fee for an opportunity to be presented on a platform with high traffic.
Shein and Temu have entirely different business models. Shein is a typical 1P retailer. The brand buys enormous wholesale bundles from manufacturers all over China and then markets all those goods under one brand.
The orders placed by Shein are usually so large that some of their suppliers work entirely for the brand, although technically they are all considered independent businesses. For the very same reason, Shein can offer such low prices. The company has enormous negotiating power and networks to secure exclusive deals and prices.
On the other hand, Temu looks more like a 2P business, which means that while Shein is known as a mass-market brand alongside Zara, H&M, and other fast-fashion moguls, Temu is a marketplace.
Temu allows thousands of independent sellers to showcase their goods on its website and mobile app (which, by the way, last year became the most downloaded mobile app in the United States). All those sellers have to do is fill up a profile for every product, provide images and descriptions, and bring their inventory to Temu`s handling centers, where the company will process the orders and deal with the logistics. The profit from every sale will be divided between the seller and the marketplace.
But why would you care about Temu`s or Shein`s business model? It is an important thing when it comes to analyzing reviews and deciding which option suits you better. The difference between business models determines the sellers` responsibility for their inventory.
When Shein or any other similar 1P company puts their label on a product, it means that they are fully responsible for its quality and your overall shopping experience.
Temu has a bit of a different approach. As a marketplace, they are as responsible for the inventory as your local mall is for what is sold in a small kiosk. Marketplaces only provide “space” and logistics powers, but in most cases, they don`t really control or even care what the independent sellers are offering through their platform. As a result, two seemingly identical products may come from different sellers and manufacturers when you shop in Temu.
It explains why customer reviews about Temu, and other similar marketplaces are so mixed and patchy. At the end of the day, people are describing their experiences with thousands of different sellers, not one company.
Do Temu and Shein sell the same things?
So, if Temu and Shein don`t really manufacture their products and technically resell wholesale bundles using different approaches, is it possible that they receive their inventories from the same manufacturers and therefore, sell the same things?
Yes and no. You may probably notice similar or even identical items on the Shein and Temu websites and apps. Moreover, there is a possibility that they even come from the same sources. Although considering the number of various manufacturers all over China, the chances of a 100% match are pretty low.
However, the main difference between Shein and Temu at this point is the type of goods that they offer. Shein occupied a lucrative fast fashion and lifestyle” niche, selling mainly women`s clothing and footwear, accessories and jewelry, cosmetics, and beauty accessories.
Temu decided to cast a much wider net and sell literally everything. Except for clothing and footwear for the whole family, toys, accessories, and beauty products, here you can find all sorts of gadgets, tools, auto-moto goods, and much more.
For the very same reason, Temu and Shein have different marketing campaigns. While both companies took over social media and are betting on collaborating with influencers, Temu aims at a much broader audience. That is only Temu`s famous Super Bowl campaign!
The owners of Shein and Temu
At the end of the day, it is all about the owner, right? No matter how much sheep clothing a wolf may have in their wardrobe, it is still the same wolf.
The market knows many examples of how seemingly different brands and products actually come from the same company. This approach to business is called a multi-brand strategy, and its main purpose is to cover as wide an audience as possible. For example, Nestle has over 2000 different brands in their portfolio, and not all of them are even related to food.
When it comes to Chinese companies, the investigation of who owns what can be extremely difficult for several reasons. First of all, Asian business is extremely secretive. Most companies don`t disclose where their actual headquarters are located, who their suppliers are, or other seemingly essential information.
Also, we all know that it is really hard to find a product that is not made in China today, which means that this region has a vast and interconnected network of manufacturers, suppliers, and retailers—a tangle that is almost impossible to unravel unless you are a part of this complex system.
But there is good news! Shein and Temu are companies that do their best to look as public and transparent as possible. And although they certainly have more skeletons in their fast-fashion wardrobe than a Halloween sale in Target, it is pretty easy to track who owns Shein and Temu.
Shein, the worldwide famous fast fashion retailer, was founded in Nanjing, China, in October 2008 as ZZKKO by entrepreneur Chris Xu. Since then, Chris Xu has become a billionaire. He still owns a major chunk of the online retailer.
However, the notorious secrecy of Asian business manifests itself when you try to dig deeper into Shein`s ownership as well. Technically, we don`t really know anything else about Shein’s ownership or the mastermind behind it. In 2022, Shein moved its headquarters to Singapore. This is basically it.
In one of many lawsuits the odious online retailer received in the past several years, Chris Xu was named “a mysterious tech genius, which perfectly describes this person`s role not only in Shein itself but in the modern market in general. However, except for the hype in social media, which definitely helps the sales, there may be a pretty practical explanation for why Shein is so famous yet so full of mystery at the same time.
Shein is a privately held company. That is why it is not required to disclose information about sales, employment, or other matters that publicly traded companies have to reveal. Needless to say, this exact information is the subject of concern and the source of endless rumors about the brand, which only contribute to the buzz around it. And we all know that there is no such thing as bad publicity.
So, what about Temu? Does it also belong to some mysterious genus? Or maybe even the same one? Not really. According to Wikipedia, Temu is owned and operated by the Chinese-based and Cayman Islands-registered company PDD Holdings. It is also known as Pinduoduo, a popular online commerce platform in China that is mainly focused on the agriculture industry.
Nobody knows what inspired a business that sold farming equipment to start an online marketplace with toys and clothing, which will be focused mainly on US and European consumers, but it definitely worked! Temu’s gross merchandise volume, which is total sales before expenses, surged from $3 million in September 2022 to $192 million in January 2023, and it keeps growing.
The bottom line is that there is no evidence that Shein and Temu have the same owner or management company or are related in any way as of 2023. But wait, there is more! Temu and Shein do not just refuse to be relatives. In fact, they are probably the biggest rivals the retail industry has ever seen!
The competition between Shein and Temu explained
It happens in business all the time. Everybody sues everybody and files countersuits. It seems like it is a means of communication in the business community.
Of course, we all heard about endless lawsuits against Shein and Temu, as these retailers seem to be particularly notorious for “getting inspired” by other brands` designs and the shameless theft of images and product descriptions from other websites and social media profiles.
But did you know that probably the biggest and most expensive trial in the history of Reatl is actually happening right now between Temu and Shein? In the summer of 2023, Temu filed an antitrust lawsuit against Shein after the e-commerce mogul accused the younger and yet not less successful marketplace of deception. In fact, it is probably the reason you are reading this article in the first place.
When Temu just started launching its marketing campaigns, it was “dipping its toes” into various strategies to gain the trust of the American and European Gen Zs, who were already known as pretty regular customers of Shein.
Apparently, like everything else, Temu`s marketers tried to surf the wave made by Shein and adjusted their campaign so that the two companies became regularly associated. In other words, when you were searching for SHEIN or liked some post or TikTok with a SHEIN haul, you basically became targeted by endless Temu commercials and identical social media posts, which could make you believe that Temu and SHEIN are actually the same thing.
SHEIN`s lawsuit contains allegations that Temu`s marketers were even creating fake accounts and bots on Twitter and other social media platforms that contained the word “SHEIN” in their nicknames or BIOs but actively encouraged followers to check out Temu.
Let`s be fair. No matter how you may feel about Shein and its business model, it is an incredibly successful company, a phenomenon that in many ways, determines how today’s e-commerce industry looks and functions. And it is pretty natural that Temu, as a new player in a viciously competitive market, wanted to replicate Shein`s success especially since both companies target more or less the same audience and market segment for off-price shopping.
While SHEIN`s accusations seem to be justified when you look at the lawsuit this way, Temu decided to defend themselves fiercely, meeting SHEIN with counter-accusations of unfair practices.
In the very beginning, Temu and Shein didn`t really have much in common except for the fact that they offered cheap products and international shipping. Shein was always more about fashion, while Temu, the child of a farming equipment distributor, sold mainly household goods and toys. However, with time, SHEIN decided to adopt a more “lifestyle” approach and offer home décor, accessories, and gadgets while Temu started exploring the fashion market. Eventually, the collision of two flagships of Chinese retail was simply inevitable!
Today, Temu accuses Shein of forcing suppliers to avoid deals with the multi-seller marketplace, while Shein claims that Temu is sabotaging the expansive network of suppliers that the retailer established long before Temu was conceived.
According to information about the lawsuit that leaked online, both companies technically act the same, forcing suppliers to accept extremely low prices and creating contracts so that they may end their business with them without any notice or explanation. In other words, there is no “good guy” in this story.
However, with all the hype and publicity that the war between Shein and Temu brings to both companies, it can turn into a fatal disservice for them as well. We have already mentioned that the ongoing lawsuit is said to be the most expensive in the history of retail. It can only mean that it attracts a lot of attention, not only from social media users.
As of August 2023, the lawsuit had garnered close interest from politicians and policy experts in Washington. It looks like public concern about the intellectual property threat that the Chinese retail giants pose has finally infiltrated some high offices. The competition we witness today may eventually become a race to the bottom.
While Shein and Temu are definitely similar in the way they conduct their businesses, attract customers, and build their inventory, those similarities mainly come from the fact that both brands have the same background and the same target.
While Shein started as a purely fast-fashion brand and Temu was originally designed as a multi-seller marketplace, both companies seem to blend in and mimic each other as they start chasing the same audience and using the same marketing strategy, which proved extremely successful and efficient.
Conclusion
Shein and Temu do not belong to the same company; they don`t share business models, but they represent a powerful phenomenon in modern consumer culture, offering us more and more affordable goods with international shipping and rapidly updating inventory. And probably, such companies and the hype around them are exactly what our offspring will remember us for.
So, do you enjoy reading this analysis, or did I miss anything that you would have wanted to know? If so, send me a message by using the contact form at the bottom of the Missmv website and I will update this Temu vs. Shein comparison so we can educate more fashion enthusiasts. Till next time, See ya…
