Temu's U.S. sales growth decelerated to 37% in August, down from 45% in July. Despite a slight market share gain to 3.4%, DAUs fell 17%. Bank of America cites plateauing sales and tough comparisons, along with challenges from parent Pinduoduo.
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%.
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.
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.
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?
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