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“Marketed by China” is on the rise, disrupting US retail landscape
Rebbeca Ren
April. 7 2023
Speaking of successfully making a splash in the US consumer market, Shein was the trailblazer surpassing the impact of any of its Chinese counterparts. Additionally, Temu achieved tremendous success by becoming the top downloaded shopping application in both the App Store and Play Store mere months after its debut.
“Companies like Shein and Temu are getting a taste of success for a business model that hasn’t historically worked,” Jason Goldberg, chief commerce strategy officer at Publicis, told Morden Retail.
Indeed, looking back a decade, the success that Shein and Temu are currently enjoying in Western commerce would have been unimaginable. China’s role then was primarily that of anonymous factories producing goods for US brands and retailers or selling through US e-commerce platforms like Amazon, with limited direct-to-consumer marketing.
But now, “Marketed by China” is cutting out (US) domestic retailers. The new retailers, Shein, Temu, and whoever comes next, are breaking out of the Amazon sandbox," Juozas Kaziukenas, founder of Marketplace Pulse, said in a recent blog post.
The transition from the previous "Made in China" and "Sold by China" models to the more sophisticated "Marketed by China" model can be attributed to the growing influence of social media and the increasing expertise of Chinese companies in utilizing these platforms.
"Shein represents “Marketed by China” because it is a marketing powerhouse with a massive social networking presence rather than a plain catalog offering cheap goods," Kaziukenas said. "For example, it has more followers on Instagram than Amazon, Walmart, and AliExpress combined."
The company’s influence on TikTok is unparalleled as well, whether compared to its fast fashion competitor Zara or US retail giant Amazon: It has 6.4 million followers and has accumulated 54 billion and 9.2 billion views under the hashtags #shein and #sheinhaul, respectively. In comparison, Zara has 17 billion and 5.5 billion views under #zara and #zarahaul, respectively, and Amazon has 47.3 billion views under #amazon.
Shein’s adoption of a social media-first marketing strategy has enabled it to efficiently reach its target audience and promote its products. Through the effective utilization of influencers and its significant social media presence, the brand creates a buzz and develops relationships with potential customers.
Temu has also followed suit in Shein's marketing. Although it only launched in the US last September, the e-commerce platform, owned by China's PDD Holdings, has already amassed 1.66 million followers on Facebook, 431,000 on TikTok, and 159,000 on Instagram.
Both Shein and Temu have grown quickly through aggressive investments in digital marketing and social commerce. They employ a lot of people in influencer marketing and social commerce, according to Goldberg.
Chris Pereira, founder and chief executive of the North American Ecosystem Institute, an organization that focuses on assisting Chinese companies with overseas marketing, also agreed that social media is a crucial marketing channel for both Temu and Shein, as they both target a younger demographic of consumers.
By focusing their marketing efforts on social media, these companies can effectively engage and resonate with their target consumers, ultimately increasing their brand awareness, according to the marketing expert.
These Chinese businesses use a variety of marketing tactics on social media, ranging from direct discounts and referral bonuses to lucky draws and freebies. Temu, in particular, conducted marketing campaigns frequently and intensively, dwarfing American retailers.
Pereira attributes US retailers' less aggressive approach to social media marketing to the fact that they already have a solid consumer base and that the consumer market is not as fraught with change as it is in China.
“Compared with Chinese consumers, who are more open to trying new products, new services, etc., consumers in the North American market tend to be more conservative. In China, for example, mobile payments quickly became the norm within a few years, while credit cards and cash are still commonly used in North America,” he told PingWest. “The North American consumer market hasn't changed much over the past 30 years. Therefore, local businesses do not need to rack their brains to come up with fresh marketing strategies since they already have hosted a loyal consumer base,”
From a broader perspective, A16Z suggests that this disparity in marketing approach reflects a deeper disconnect between how Chinese and US consumer companies do business.
While many consumer startups and venture capitalists in the US are hesitant to depend on paid advertising for growth, their Chinese counterparts devote significant resources to marketing, particularly those that rely on AI-driven recommendations and discovery. This is because a considerable user base is essential for their algorithms to function optimally. Like TikTok, Temu and Shein require a large number of users to enable their recommendation algorithms to make smart decisions regarding what content or products to present to their audiences.
The Silicon Valley-based investor foresees Temu’s enduring influence in the US market and predicts that it will continue to disrupt the online shopping industry with its innovative shopping norms and behaviors.
As the Chinese economy grows in global significance, more Chinese firms are likely to expand into overseas markets. “It is foreseeable that the trend of ‘Marketed by China’ will persist, giving rise to numerous players with competitive advantages in the global market,” remarked Pereira.
en.pingwest.com
Rebbeca Ren
April. 7 2023
Speaking of successfully making a splash in the US consumer market, Shein was the trailblazer surpassing the impact of any of its Chinese counterparts. Additionally, Temu achieved tremendous success by becoming the top downloaded shopping application in both the App Store and Play Store mere months after its debut.
“Companies like Shein and Temu are getting a taste of success for a business model that hasn’t historically worked,” Jason Goldberg, chief commerce strategy officer at Publicis, told Morden Retail.
Indeed, looking back a decade, the success that Shein and Temu are currently enjoying in Western commerce would have been unimaginable. China’s role then was primarily that of anonymous factories producing goods for US brands and retailers or selling through US e-commerce platforms like Amazon, with limited direct-to-consumer marketing.
But now, “Marketed by China” is cutting out (US) domestic retailers. The new retailers, Shein, Temu, and whoever comes next, are breaking out of the Amazon sandbox," Juozas Kaziukenas, founder of Marketplace Pulse, said in a recent blog post.
The transition from the previous "Made in China" and "Sold by China" models to the more sophisticated "Marketed by China" model can be attributed to the growing influence of social media and the increasing expertise of Chinese companies in utilizing these platforms.
"Shein represents “Marketed by China” because it is a marketing powerhouse with a massive social networking presence rather than a plain catalog offering cheap goods," Kaziukenas said. "For example, it has more followers on Instagram than Amazon, Walmart, and AliExpress combined."
The company’s influence on TikTok is unparalleled as well, whether compared to its fast fashion competitor Zara or US retail giant Amazon: It has 6.4 million followers and has accumulated 54 billion and 9.2 billion views under the hashtags #shein and #sheinhaul, respectively. In comparison, Zara has 17 billion and 5.5 billion views under #zara and #zarahaul, respectively, and Amazon has 47.3 billion views under #amazon.
Shein’s adoption of a social media-first marketing strategy has enabled it to efficiently reach its target audience and promote its products. Through the effective utilization of influencers and its significant social media presence, the brand creates a buzz and develops relationships with potential customers.
Temu has also followed suit in Shein's marketing. Although it only launched in the US last September, the e-commerce platform, owned by China's PDD Holdings, has already amassed 1.66 million followers on Facebook, 431,000 on TikTok, and 159,000 on Instagram.
Both Shein and Temu have grown quickly through aggressive investments in digital marketing and social commerce. They employ a lot of people in influencer marketing and social commerce, according to Goldberg.
Chris Pereira, founder and chief executive of the North American Ecosystem Institute, an organization that focuses on assisting Chinese companies with overseas marketing, also agreed that social media is a crucial marketing channel for both Temu and Shein, as they both target a younger demographic of consumers.
By focusing their marketing efforts on social media, these companies can effectively engage and resonate with their target consumers, ultimately increasing their brand awareness, according to the marketing expert.
These Chinese businesses use a variety of marketing tactics on social media, ranging from direct discounts and referral bonuses to lucky draws and freebies. Temu, in particular, conducted marketing campaigns frequently and intensively, dwarfing American retailers.
Pereira attributes US retailers' less aggressive approach to social media marketing to the fact that they already have a solid consumer base and that the consumer market is not as fraught with change as it is in China.
“Compared with Chinese consumers, who are more open to trying new products, new services, etc., consumers in the North American market tend to be more conservative. In China, for example, mobile payments quickly became the norm within a few years, while credit cards and cash are still commonly used in North America,” he told PingWest. “The North American consumer market hasn't changed much over the past 30 years. Therefore, local businesses do not need to rack their brains to come up with fresh marketing strategies since they already have hosted a loyal consumer base,”
From a broader perspective, A16Z suggests that this disparity in marketing approach reflects a deeper disconnect between how Chinese and US consumer companies do business.
While many consumer startups and venture capitalists in the US are hesitant to depend on paid advertising for growth, their Chinese counterparts devote significant resources to marketing, particularly those that rely on AI-driven recommendations and discovery. This is because a considerable user base is essential for their algorithms to function optimally. Like TikTok, Temu and Shein require a large number of users to enable their recommendation algorithms to make smart decisions regarding what content or products to present to their audiences.
The Silicon Valley-based investor foresees Temu’s enduring influence in the US market and predicts that it will continue to disrupt the online shopping industry with its innovative shopping norms and behaviors.
As the Chinese economy grows in global significance, more Chinese firms are likely to expand into overseas markets. “It is foreseeable that the trend of ‘Marketed by China’ will persist, giving rise to numerous players with competitive advantages in the global market,” remarked Pereira.
“Marketed by China” is on the rise, disrupting US retail landscape - PingWest
Chinese e-commerce platforms are rapidly winning over the hearts and minds of American consumers, a phenomenon that would have been difficult to imagine a few decades ago.
en.pingwest.com
