Shein and Temu growth rates expected to drop

Next year, Asian online marketplaces Shein’s and Temu’s growth rates will drop significantly. This is predicted in a report published by Forrester. The expected decline is related to current complaints about the marketplaces.

Forrester, a research firm based in the United States, often publishes reports about retail in Europe. Last year, the firm wrote that it expects a boom in online retail spending in Europe in the coming years.

Retail predictions for 2025

Now, it has published a report that examines retail predictions for 2025. In it, the firm describes that the online marketplaces Shein and Temu will experience a “plummet” in growth sales.

Earlier this year, Temu achieved a larger market share (in value) than its competitor Shein in France. It was able to do that within four months after its launch in the country. According to research, Temu has a penetration rate in France of 11.9 percent. Shein’s rate in the country is 12.8 percent.

Targets of environmental groups and governments

It is evident that Shein and Temu have been fast-growing in Europe since their launch here. Yet, Forrester’s report states that “complaints about quality of goods, unethical production processes, unfair advantages in shipping, and increased nationalism” make them targets of environmental groups and governments.

Both marketplaces have already had to provide detailed information on several aspects of their services to European shoppers to the European Commission. Additionally, consumer and interest organizations in Europe have already opposed the platforms several times, arguing that they do not comply with European regulations.

‘Shein has not had a successful IPO yet and Temu is dealing with high customer acquisition costs’

These issues are thus expected to slow down growth rates of these platforms. Additionally, Shein has been looking into an IPO in the United Kingdom, but it has not successfully done that yet. Temu is also dealing with high customer acquisition costs, which could also cause slower growth.