📉 Growth Rate Drop Expected
According to Forrester’s 2025 retail forecast, Shein and Temu, once the titans of ecommerce growth, are facing a significant slowdown. Despite heavy investments in digital advertising, the report predicts that both companies will see a “plummet” in growth rates next year. Shein recently doubled its profits in the UK, and Temu's owner PDD saw growth, but market experts believe these trends won’t last.
🌍 Growing Backlash and Criticism
Shein and Temu have faced intense scrutiny over product quality, labor practices, and environmental impact. The Forrester report highlights that rising complaints and protests over “unethical production processes” and “unfair shipping advantages” are likely to impact their customer appeal. The companies are also under pressure from government regulations and environmental advocates calling for reforms.
📈 Financial Pressures and Delayed IPO
Temu’s parent, PDD, has admitted that its “high revenue growth is not sustainable.” The company reported high costs to attract new customers, impacting profitability. For Shein, a long-awaited London IPO has yet to be secured, signaling potential instability. PDD saw its market valuation plunge by over £41B in August after Temu missed key sales targets, highlighting their challenging financial outlook.
🔮 Future Growth Uncertain
With both companies dealing with financial strains and public backlash, their growth trajectory remains uncertain. Though Shein recently overtook Boohoo in the UK and saw a near 40% jump in sales, industry experts warn that such rapid expansion could backfire if operational and reputational risks are not addressed. As Temu grapples with rising costs, its future remains as unclear as Shein’s IPO plans.
Will Shein and Temu’s growth rates continue to decline?
