📉 Slower Sales Growth in the U.S.
Temu’s U.S. sales growth dropped from 45% in July to 37% in August, down significantly from the 99% growth it saw in Q2 2023. According to Bank of America, the slowdown reflects tougher year-over-year comparisons and sales plateauing. Despite this, Temu's U.S. market share relative to Amazon remained stable at 3% during the first seven months of 2024. The August figure showed a slight uptick, rising 40 basis points to reach 3.4%.
🛍 Decline in Daily Active Users
According to Sensor Tower, Temu's daily active users (DAUs) in the U.S. dropped by 17% year-over-year in August 2024. This decline comes as the platform continues to battle increased competition in e-commerce. Temu's parent company, Pinduoduo, has emphasized shifting from rapid expansion toward more sustainable growth by focusing on higher-quality merchants and removing "bad actors" from its platform.
💼 Market Share Versus Amazon
Although Temu’s U.S. market share is relatively small compared to Amazon, it has remained stable at around 3% for most of 2024. In August, Temu managed to increase its share slightly to 3.4%. BofA analysts noted that Temu grew 3.5% month-over-month, while Amazon saw a slight dip following its Prime Day promotions. Despite this increase, analysts expect further growth challenges as Temu shifts focus from aggressive expansion to sustainable operations.
🌏 Impact on Online Advertising
BofA also raised concerns about the potential ripple effects of Temu's slowdown on online advertisers like Meta. About 10% of Meta’s ad revenue comes from China-based companies, including Temu and Shein. While a slowdown in ad spend from Temu could present minor challenges for Meta, BofA stated that a broader decline in ad spending would be required to significantly impact Meta's overall revenue.
Is Temu’s growth slowdown temporary or long-term?
