No Black Friday windfall for Chinese sellers on Temu and Amazon as competition rises

Cut-to-the-bone pricing is eating into the profit margins of Chinese merchants selling online to global shoppers

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Black Friday sales signs on Oxford Street in London, Britain. Photo: Xinhua

Wency Chenin ShanghaiandCoco Fengin Guangdong

Published: 11:00am, 8 Dec 2024Updated: 8:56pm, 8 Dec 2024

Chinese sellers on overseas shopping sites, from Temu to Amazon.com, are struggling to turn a profit during this year’s Black Friday sales, as fierce competition and narrowing margins take a toll on their earnings.

A clothing factory owner in the southern trade hub of Guangzhou, surnamed Xie, said Black Friday sales at his Temu store plunged 30 per cent from last year. Another clothing factory worker surnamed Xu, who is in charge of the firm’s Temu business, said the shop offered a 10 per cent discount on products from Black Friday to Cyber Monday, but sales volume was only around 20 per cent higher than usual.

“There wasn’t much profit,” Xu said on Thursday on the sidelines of a Temu event in Guangzhou, capital of southern Guangdong province.

Since their respective launch in the US in 2022 and 2023, Temu and fast-fashion giant Shein have kicked off an e-commerce war, dangling steep discounts and free shipping to entice shoppers into buying US$10 shirts and US$3 earrings mailed directly from China.

“Though initial estimates show an increase in overall [consumer] spending during this shopping season, there has been competitive pressure due to the emergence of Chinese e-commerce platforms,” said Justin Koh, Shanghai-based director at consultancy AlixPartners. This year’s sales period also started earlier than ever, he added.

Chinese sellers say they are finding it harder to make a profit on overseas shopping sites, such as Temu. Photo: AFP

Shein is currently offering discounts of up to 90 per cent on more than 300,000 items through the end of the year. Temu is plastering tags like “Last Day to Save” and “Limited Time Offer” all over its site to woo customers.