Chinese E-Commerce Platform Temu Challenges US Dollar Stores

With a 17% market share, Temu's low prices and novel marketing strategies are shaking up the discount retail sector.

Chinese e-commerce platform Temu has captured nearly 17% of the US discount stores market share, posing a significant threat to US dollar stores including Dollar General, Dollar Tree, and Five Below.
Temu's success is attributed to its low prices on household goods and consumer staples, its use of social media influencers for marketing, and its direct-to-consumer model leveraging China-based manufacturers.
Dollar General, the industry leader, has seen a significant decline in market share, from 57% in January to 43% in November.
Dollar stores are struggling with operational issues, a shift in consumer demand, and retail theft, leading to falling profit margins and multiple cuts in annual profit forecasts.
Temu's parent company, PDD Group, reported a 94% increase in revenue to 68.84 billion yuan ($9.62 billion) in the quarter ended Sept. 30 from a year ago.