The Chinese e-commerce battle lands in the U.S.
In 2022, China, the world's largest e-commerce market, saw significant growth in consumption patterns, driving Chinese e-commerce apps to enter the American shopping arena. Their success is attributed to affordable prices and adept utilization of social media. This aligns with the growing trend as Gen Z, expected to surpass Gen X in the number of US digital buyers by 2025, seeks seamless digital experiences across various platforms. Chinese e-commerce platforms are clearly making inroads into the U.S. market, and ahead, we explore the three major players gaining traction.
As Cassandra noted in our most recent report, The September Issue: Luxury Edition, TikTok Shop went live in the U.S. earlier this month, adding an e-commerce element to the popular app. The Shop enables its 150M U.S.-based users to find and shop for products within the app, bringing shoppable videos and live streams directly to users’ feeds while focusing on capturing a significant market share for pre-owned luxury items, sneakers, and collectibles. To support businesses with the launch of in-app e-commerce, the company also introduced its TikTok Shop Seller Center app that allows merchants to connect directly from other e-commerce platforms like Shopify.
Another company Cassandra reported on recently, DHGate, is a prominent e-commerce platform that has carved a unique niche by specializing in unbranded goods and “dupes.” With a staggering 36M registered buyers hailing from 223 countries and a sprawling network of 2.3M suppliers, DHGate has made a significant mark in the industry. What sets DHGate apart is its discreet approach – you don’t just find a product, add it to your cart, and check out. Instead, you use specific keywords to find what you want, which also entails a lot of reading of reviews and ratings. However, delving into this world entails a certain level of risk and knowledge, but the rewards are worth it for many Gen Zs looking to get luxe for less.
— Melanie, 25, FL (Cassandra Collective)
If you've been following the digital landscape, you've likely witnessed the explosive growth of China's e-commerce platform, Temu. In its first month online, it had 4.5 million monthly active users in the United States, surging to 77.3M by July. This rapid rise is attributed to an extensive advertising campaign and significant investments, including two Super Bowl commercials. Temu now dominates mobile app downloads in the U.S., offering affordable, unbranded products, often at deep discounts. However, much like the others, concerns about potential national security breaches and user data privacy have emerged, complicating Gen Z's value system that sometimes prioritizes low prices over privacy and ethical standards.