BEIJING, November 1 (TMTPost)— China’s fast fashion heavyweight Shein was overtaken by Temu, an overseas platform launched by Chinese e-commerce giant PDD Holdings Inc. just a year ago.

Credit：Visual China

Spending on Temu for the first time outweighed Shein in the U.S. market in May, and the former was 20% higher than the latter that month, according to Bloomberg Second Measure, which analyzes billions of credit and debit card transactions. The data provider also estimated that Temu has consolidated its lead every month since May, and its sales in September have grown into more than twice as much as Shein in the United States.

Founded in 2009, Shein has replaced ZARA and H&M in the U.S. market as the benchmark of the new-generation fast-fashion brands, with products sourced entirely from the Chinese supply chain. Temu’s growth was far more astonishing since it launched the U.S. branch of Temu on September 1, 2022, offering $2 Bluetooth headphones, $4 sneakers, and more daily necessities under $1.

Temu expanded further this year.  It ran a series of ads during the Super Bowl on February 14, highlighting the platform's low prices and repeating the slogan "Shop Like a millionaire" in its commercial. The same month it entered Canada in February 2023, and the reward for inviting new users by asking them to help get a bargain price for orders were physical commodities instead of cash. Just a month later, Temu launched in Australia and New Zeal, and the following month rolled out in many Europeans countries such as Germany, France, the U.K., Italy and Spain.

Temu became one of the most popular applications in the United States in the past year. It was ranked the most frequently downloaded app in the country in both Apple App Store and Google Play’s rankings most of the year 2023, according Apptopia, an app data intelligence platform.

Temu has launched its marketplaces in 47 countries around the world, and its app was downloaded 200 million times in the past year, and it attracted 120 million worldwide viewers in September alone, half of which came from markets outside the United States, reported Chinese digital news media outlet LatePost. Over the year, Temu ships an average of 1.6 million packages every day, and most of the goods shipped to the U.S.s by sea, according to the report. It said that about 9% of Americans shopped on Temu in the past year.

Sales on Temu in the third quarter topped US$5 billion, and September, its first anniversary of launch in U.S., saw the more rapid growth as its daily gross merchandise value (GMV) even reached US$80 million, another Chinese media outlet 36Kr learned from people familiar with the matter recently. It also learned that U.S., as Temu’s first overseas market, contributes 60% of its total sales. The recent data suggested Temu’s sales in September alone are roughly the same as the first half of this year. 36Kr previous reported its GMV from January to June was just shy of US3 billion.

If Temu maintains such growth, it could meet its annual GMV target of US$15 billion early as the arrival of Black Friday and Christmas in the last quarter. China International Capital Corporation (CICC) even anticipated that Temu’s GMV can hit US$18 billion by the end of the year, which is equivalent to 60% of Shein’s annual GMV in 2022. 36Kr’s sources said break-even has not yet been put on Temu’s agenda and it currently focuses on GMV growth and the market size. PDD was said to increase budget for Temu to RMB23 billion, up from RMB20 billion in the beginning of this year, to meet demand for expansion in new markets.