In the bustling landscape of logistics in Southeast Asia, Teleport is a potential game-changer, striving as it is to achieve 24-hour or next-day delivery at a lower cost. As the logistical arm of Capital A Bhd, Teleport wants to challenge the status quo of the industry.

But amid the region’s rapid economic expansion and escalating consumer demands, the critical question looms: can Teleport truly revolutionize the delivery landscape of Southeast Asia? 

Teleport’s growth has been impressive. The company has rapidly expanded its presence across key markets in Southeast Asia, including Malaysia, Thailand, Indonesia, Philippines, India, Singapore, and China. This strategic expansion has allowed Teleport to tap into the region’s burgeoning e-commerce market, catering to the growing demand for seamless and efficient delivery services.

ON THE HORIZON: TRANSPORT AND LOGISTICS IN 2024

Aaron Raj | 4 December, 2023

In a recent interview with Tech Wire Asia, Pete Chareonwongsak, the CEO of Teleport, shared insights into how the company is employing innovation to tackle future challenges in Southeast Asia.

How do you view the logistics industry in Southeast Asia amid rising demand for faster, cheaper deliveries?

CEO Pete Chareonwongsak. Source: Teleport

I think we do not have enough homegrown Southeast Asian logistics companies. When someone says Southeast Asia logistics, the names that typically come to mind are J&T and Ninja Van. The former initially started in Indonesia and is funded by the Chinese, so it’sexpanded to where 90% of its business now comes from China, not Southeast Asia. So it’s never really been born and bred here.

The same is true with Ninja Van, which started in Singapore and expanded to all the Southeast Asian countries. That’s the closest, but it’s funded by global venture capital.

That is why I’ve always felt we, Teleport, have an opportunity as we were born and raised here in Southeast Asia. Our DNA, infrastructure, and everything in between is here; we will not leave this part of the world. 

So my understanding of Southeast Asia logistics is that many great companies come and go: their focus starts here but eventually moves elsewhere. Our mission has been to connect Southeast Asia better than anyone else, especially in performing next-day delivery.

Has Teleport proven its viability in its current market, or does it still have much to prove to establish a more substantial presence?

There’s a lot more. Based on statistics, we could reach about five million SMEs of a specific size in the region and give them access to our services. Everyone always talks about the SME opportunities in Southeast Asia, only to eventually realize that the money’s not there. But the opportunity is there. If you’re here long term, then at some point, you have to do something that allows collaborations to happen. 

So, there are still opportunities in the long term. We currently serve at most 10,000 clients, but five million SMES are within the region. That means we have a long way to go in making it accessible.

Why do logistics companies frequently expand beyond Southeast Asia? What do they look for elsewhere that they need help finding here, especially given the region’s abundance of SMEs and MSMEs?

What is missing is the total addressable market. That’s why they go elsewhere because, undeniably, there are many larger markets that exist elsewhere today. So, at some point, when they’re funded a certain way or aim to grow a certain way, they need to go and find a large market to justify their reach and growth. That makes it hard for Southeast Asia-focused companies to stay here. There’s always something else, somewhere else. 

We have an understanding of the region that some other companies lack, and our dedication and focus is here, today and tomorrow. So that’s what we see that they don’t see, perhaps making sense of their move to look elsewhere for markets. But if no one builds like we are doing, connecting Southeast Asia in a cheaper, faster, and better way, then SMEs will never have a real opportunity to grow. 

Many of the Southeast Asian brands, e-commerce, and even supply chain operators never really have something that changes their capacity to grow. They have to flow with the market,  still to this day. So we’ve got to find some angle to serve them, and that’s really where Teleport’s focus is.

Which is Teleport’s biggest addressable market at the moment?

It is China into Southeast Asia. The region is the triangle between Kuala Lumpur, Singapore, and Bangkok. The cross-border opportunities between these three countries, in particular, are mature.

Next-day delivery at a significantly reduced cost is a bold proposition. How is Teleport working towards this goal?

If you look at the top three reasons why somebody would be willing to use Teleport, the first is price, the second is reliability, and the third is speed. You have to hit all three, and that is very hard. But that’s what we’re trying to do. How do we bring the actual cost down? Then, once we’ve brought the cost down, how do we make money? People need to understand what it costs us to enable next-day deliveries.

Our view on life now is pretty simple: how do we get the cost down? And the way to do that is to not start the business model by buying a lot of stuff. So our first question was how do we build the business model we want without owning anything initially? The most important thing about next-day delivery is sending things between two borders. How do we do that in a next-day fashion? It’s got to go on a plane. 

So, how do we put stuff on a plane? There are only two ways. One is you buy some aircraft, and FedEx, DHL, and UPS have bought hundreds of planes. So they’ve signed up for that visibility, and if we want to do that, we would have to compete against them over time with a better cost solution. 

But what are other ways to put stuff on planes? Well, you and I fly everywhere, and every time a plane flies, a little bit of space is left over. That’s called the belly. How do we get access to that space across Southeast Asia? We need partnerships, and that’s where AirAsia came in. That’s how we built the business, off AirAsia’s belly. We wouldn’t be here without it, because it gave us the most extensive Southeast Asian network.

With those spaces overnight, we then had to figure out how to build a business model on that space, which is very cost-effective. Because passengers have paid for the seats and baggage allowances, we need to figure out how to bolt that little bit of space onto the rest of the business model, which is end-to-end delivery. Essentially, that was how we built the business. So it becomes much easier when you don’t own the thing. 

The second thing is figuring out how to partner so you can gain access to the asset you need. The third is then how you tie it all together and do it.

Does Teleport have specific growth goals for its portfolio regarding the number of businesses?

We set a 24-month goal. Around two million e-commerce parcels a day are coming into Southeast Asia, and we want to capture most of that. For perspective, two million a day would be on par with our esteemed competitors. The amount is undoubtedly huge on a global scale, but we are looking towards that direction.

What role can technology play in facilitating the transformation of the logistics industry to meet the demands of faster and more affordable deliveries?

My view on addressing that this year is to slow down the growth slightly, which is shocking to most people. But if we don’t build these foundations with the right technologies, we won’t reach the two-year goal of two million deliveries, for example. So this is the year where we figure out the value of Gen AI or any AI solutions to our operations.

Source: Teleport

How many airplanes are in the fleet you use?

Airasia has 204 passenger aircraft, which will all be fully re-activated by the end of the first quarter. Teleport owns three freighter planes in Malaysia. On top of that, we have 30 airline partners based in Asia and Southeast Asia.

What changes do you anticipate in the competitive landscape if Teleport achieves its vision, and what adjustments might other logistics companies need to make in response?

A couple of things. Firstly, in this region, there are a lot of low-cost carriers that would eventually think about how to continue to improve their business. Like how Teleport built the company off AirAsia’s back, many other low-cost carriers will do the same – spin off a logistic business from their airline operations.

Even in China and Latin America, people have started to spin off their logistics business. So, the multimodal angle is going to be an essential trend.

https://www.linkedin.com/posts/teleportasia_black-box-ceo-pete-on-awan-launch-part-activity-7093153593406484480-GV61?utm_source=share&utm_medium=member_desktop

The post Teleport’s quest for next-day e-commerce delivery in Southeast Asia appeared first on Tech Wire Asia.

In a typical e-commerce landscape where competition is fierce and attention spans are fleeting, companies are constantly seeking innovative ways to remain top-of-mind for consumers. Temu, a Chinese fast-fashion giant backed by Nasdaq-listed PDD Holdings, has recently made headlines with a surprising tactic: splurging on Super Bowl ads in the US. This move has sparked curiosity and speculation about Temu’s position in the US market and its strategy for staying relevant in an ever-evolving industry.

In the fast-paced world of e-commerce in the US, two giants have emerged as frontrunners in the battle for consumer attention: Temu and Shein. Their sleek interfaces, vast product offerings, and attractive deals have captured the hearts—and wallets—of millions of shoppers across America. But competition is also peaking, and Temu has been facing increasing pressure, especially from Shein.

The fast-growing Chinese e-commerce platform has to protect its market share from being constantly eroded. Temu has been forced to reevaluate its approach to maintaining relevance in the fiercely competitive US market. Last weekend, Temu splashed at the Super Bowl, airing its ad six times and dishing out a jaw-dropping US$10 million in giveaways, all in a bid to breathe new life into its waning US presence.

WHAT IS TEMU AND HOW IS IT TAKING OVER THE SHOPPING LANDSCAPE?

Muhammad Zulhusni | 27 October, 2023

The Super Bowl is an event known not only for its electrifying football showdown but also for its highly coveted advertising slots. A 30-second commercial during Sunday night’s game cost about US$7 million. With millions of viewers tuned in from around the world, the Super Bowl presents an unparalleled opportunity for brands to showcase their products and capture the attention of a captive audience.

Source: X.com

Temu’s American shopping base is dwindling, with Second Measure data showing a decline. A late January Morgan Stanley survey revealed nearly a third of users plan to decrease app usage over three months, with only eBay and Etsy showing weaker forecasts. Sales took a nosedive for Temu, plummeting 12.5% in December and 4.8% in January, a stark contrast to its 50% growth in mid-2023. Despite Temu’s struggle, overall US retail sales surged in December.

For Temu, this year’s Super Bowl represented more than just a chance to advertise its latest gadgets—it’s a strategic move to reclaim its position as a frontrunner in the tech industry. These insights, drawn from Bloomberg’s Second Measure data track a slice of US credit and debit card transactions. 

But why the sudden emphasis on splashy advertising, especially in an era dominated by digital marketing and social media influencers? The answer lies in Temu’s recognition of the power of storytelling and emotional connection in shaping consumer perceptions. By investing in high-profile ad placements during one of the most-watched events of the year, Temu aims to create memorable experiences that resonate with audiences long after the final whistle blows.

Temu’s decision to splurge on Super Bowl ads is not without risks. With advertising costs reaching new heights, there’s no guarantee that the investment will yield the desired returns. The company faces fierce competition from other tech giants vying for the spotlight during the big game. While web searches for the app spiked when its ads aired, according to Google Trends data, searches have steadily declined since early July 2023.

Overall, Temu, which made it into the US market in September 2022, spent a staggering US$3 billion last year on marketing, per Bernstein Research. And if its Super Bowl campaign is any indication, it’s not pumping the brakes anytime soon. The spending spree underscores the challenge ahead: Temu aims to attain prominence in the West that has eluded most Chinese-owned enterprises, with only Shein and TikTok managing to carve out substantial niches thus far.

The post Is Temu’s Super Bowl splurge a last-ditch effort amid fading US interest? appeared first on Tech Wire Asia.

In the corridors of power in Washington, the clout of corporate giants often speaks volumes. In 2023, two notable Chinese-founded companies, ByteDance and Shein, made headlines for their substantial lobbying efforts. As scrutiny intensified over their Chinese ties, TikTok’s parent company, ByteDance, and the fast fashion giant Shein significantly ramped up their lobbying expenditures in the US.

According to data from OpenSecrets, Shein experienced a staggering 657% surge in lobbying spending, reaching a total of US$2.12 million in 2023 compared to the previous year. Despite this substantial increase, it’s noteworthy that Shein’s lobbying budget remained less than a quarter of ByteDance’s expenditure, which stood at a whopping US$8.74 million for the same period. 

These figures underscore the growing importance of influencing US policymakers for companies with international stakes, particularly those facing scrutiny due to their origins. Tighter regulation and possible bans that continue to loom over TikTok’s future in the US pushed ByteDance to ramp up its lobbying efforts last year. Since 2019, ByteDance has spent a total of US$21.27 million.

CHINA DECOUPLES: HUAWEI ENDS US LOBBYING

Dashveenjit Kaur | 15 January, 2024

The parent company of the immensely popular video-sharing app TikTok also ensured it maintained a formidable presence in lobbying, employing 45 lobbyists throughout 2023. This figure, essentially unchanged from previous years, highlights the company’s ongoing efforts to navigate the complex regulatory landscape in the US, where concerns about data privacy, national security, and censorship have often dominated the discourse surrounding Chinese tech firms.

ByteDance spends millions lobbying, outpacing prior years amid crackdown on TikTok’s China ties. Source: Open Secret.

TikTok boasts over 150 million American users, and therefore, US lawmakers harbor suspicion regarding the app’s data accessibility to the Chinese government and its potential role in expanding China’s influence. On the other hand, Shein, known for its rapid rise in the fashion e-commerce space, made a strategic move by increasing its lobbying team, hiring 14 lobbyists in 2023 compared to just eight the year before. 

This surge in lobbying personnel reflects Shein’s proactive approach to addressing regulatory challenges and uncertainties, especially against a potential initial public offering (IPO) in the US market.

Why are Chinese entities increasing their lobbying efforts in the US?

Source: Open Secrets.

The increased lobbying activities of ByteDance and Shein coincide with a broader trend of Chinese companies facing heightened scrutiny and regulatory challenges in the US. Allegations of espionage, data privacy concerns, and geopolitical tensions have fueled calls for stricter oversight and regulation of Chinese tech firms operating on American soil.

Additionally, Shein’s decision to bolster its lobbying efforts amid an uncertain IPO outlook underscores the significance of regulatory clarity and favorable legislative conditions for companies seeking US capital markets.

The success or failure of Shein’s lobbying endeavors could have far-reaching implications for its IPO aspirations and the broader landscape of Chinese companies seeking to establish a foothold in the US market.

In conclusion, the increased lobbying expenditures of ByteDance and Shein shed light on the evolving dynamics of corporate influence and regulatory challenges faced by Chinese-founded companies in the US. As these companies navigate a complex web of political, economic, and regulatory pressures, their lobbying efforts testify to the strategic importance of engaging with policymakers and stakeholders to safeguard their interests and ensure continued growth and success in an increasingly competitive global marketplace.

The post This is how much ByteDance and Shein spent on US lobbying in 2023 appeared first on Tech Wire Asia.

Smaller businesses must find some way to sustain their profitability or face market exclusion and eventual closure. One such lifeline is the presence of Chinese suppliers which offer access to a wide array of products at competitive prices. In February, the country reported that its manufacturing activity had expanded at the fastest pace in more than a decade.

Source: Shutterstock

The allure of these suppliers lies primarily in their ability to offer cost-effective manufacturing solutions without compromising quality. Small businesses can expand their product ranges, maintain margins, and acquire unique items that set them apart from mainstream marketplaces. Business owners can access these suppliers through online B2B marketplaces, like 1688, or may choose to travel in person to trade fairs in China, like the Canton Trade Fair. At the fair, an array of China-produced products are showcased by their manufacturers, many of which could spur business growth. Approximately 200,000 foreigners attended the November 2023 event in person, and the online platform was attended by 6.6 million overseas visitors.

1688, an Alibaba Group business, serves as a B2B platform connecting international manufacturers and wholesalers with wholesale buyers in China. Specialising in diverse industries like apparel, electronics, and home furnishings, it facilitates sourcing and online transactions, providing businesses with access to a broad range of products for bulk purchasing.

“We decided to start sourcing from 1688 as we found there was a huge range of factories from China on this platform that can really enable savings from their competitive costs, without making any compromises on quality,” said Mark Brookfield from Sunrise Accessories. “We could select products that are in the range of goods that we usually buy to wholesale in Australia.”

The challenges of switching suppliers

Travelling to China to source new suppliers can be expensive for Australian and New Zealand businesses, especially when it comes to attending trade fairs of global interest that last weeks. It involves the costs of travel, accommodation, and time spent away from managing the day-to-day operations of their business. The language barrier can hinder face-to-face negotiations, while cultural differences and differing business practices might complicate agreements and contracts. Even conducting business purely online can be subject to the same problems.

After a deal is struck, things may not necessarily be smooth sailing. Vetting suppliers for quality, reliability, and ethical standards to ensure compliance with bodies like the Australian Competition and Consumer Commission (ACCC) is crucial but also challenging from a distance. Coordinating logistics, ensuring quality control, and managing shipping and customs processes add layers of difficulty, too.

Reliance on foreign suppliers, particularly those in China, introduces risks related to geopolitical tensions, trade regulations, and unexpected disruptions such as those seen during global crises or natural disasters. For example, in August 2022, a heatwave in the country led global manufacturers like Volkswagen and Foxconn to suspend their operations to save power after a spike in demand for air conditioning put pressure on the local grid. Issues like intellectual property protection and maintaining ethical manufacturing practices also pose challenges when dealing with suppliers from different countries.

Despite the risks, Australia and China continue to have a strong relationship, with a study by the University of Melbourne finding that 58 per cent of Australian companies still identify China as a top three priority for global investment. Indeed, in November 2023, Prime Minister Anthony Albanese visited China and said that “significant progress” was made in relations after talks with President Xi Jinping. China is also planning to remove tariffs on a number of Australian products to help improve the relationship between the countries.

Easing the transition with WorldFirst

While the source of some challenges may be out of a business’s hands, steps can be taken to ease the transition to Chinese suppliers. Choosing to do business remotely and hiring local sourcing agents can reduce travel costs and marginalise unreliable suppliers. Human translators are also vastly more valuable than online tools for communication, and the risk of unexpected supply chain disruptions can be mitigated by diversifying product lines, conducting thorough risk assessments, and keeping abreast of geopolitical developments.

Source: Shutterstock

But an integral part of success is the smoothing over of international payment processes to ensure that business owners deal with invoices efficiently and suppliers are paid quickly. Paying manufacturers in their local currency eases the financial burden of currency conversion fees and FX fluctuations, improves supplier relations and trust, and enhances operational efficiency – ultimately giving businesses more scope to tackle other challenges they cannot prepare for.

Leading global fintech company WorldFirst connects businesses around the world with fast and affordable payments, and offers an easy way to achieve smoother commerce with its World Account, explicitly designed for cross-border businesses trading in multiple currencies. With their World Account you have access to local sort codes, account numbers, and IBANs, working to reassure partners, minimise conversion charges, and reduce fees associated with cross-border trade. They also aid businesses in currency risk management by offering tailored hedging solutions, enabling e-commerce businesses to protect themselves from currency volatility and maintain stable pricing during economic uncertainty.

WorldFirst is currently the only provider in the market to connect to the cross-border payment solution for 1688. This purpose-built link to 1688’s network of ten million suppliers in 1,700 categories provides businesses with direct access to a wide array of products at competitive wholesale prices.

The integration also supports global selling on major marketplaces like Amazon, Wish, AliExpress, Lazada, and Shopee and facilitates direct deliveries to warehouses in China or international shipments managed by logistics partners. Online sellers can pay suppliers and collect from various marketplaces all within a single account, making reconciliation and preparation of tax returns much simpler. Furthermore, once the World Account is synched to Xero or NetSuite, businesses benefit from streamlined financial management, saving on time and accountancy fees.

Source: Shutterstock

With WorldFirst’s competitive exchange rates and transparent fees at lower rates than local banks, businesses can optimise costs while ensuring swift and reliable payments. There are no transaction size limits or hidden charges, and payments are transferred on the same day and fully comply with international trade regulations.

“WorldFirst has been a great help with this transition as we found most of the smaller factories in China did not have US accounts to pay their invoices,” said Mr Brookfield. “This way we could transfer CNH straight to their Chinese account, which is much easier for us.”

WorldFirst is a global fintech that connects businesses around the world with fast and affordable payments, access to international marketplaces, flexible currency risk management tools, working capital, and a deeper understanding of cross-border payments and global markets. The latter enables its relationship managers to provide insights into payment trends and preferred trading methods in different regions, helping businesses adapt their strategies. The Australia-based team is ready to help with any inquiries or visit the WorldFirst website, or for more information. Discover how you can take advantage of overseas suppliers with WorldFirst today.

The post The rise of Chinese sellers in sustaining small business profitability appeared first on Tech Wire Asia.

The e-commerce industry continues to experience record-breaking profits globally. While the pandemic contributed to the growth and adoption of e-commerce, post-pandemic sales continue to be high. Apart from brands selling their products online, there are also hundreds of e-commerce platforms around the world, competing with each other to provide the best offers to customers.

In Southeast Asia, the digital economy was expected to hit US$218 billion in 2023. There have been reports that the growth rate of retail e-commerce sales in Southeast Asia, which includes Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, declined from 21.6% in 2022 to 13.5% in 2023. Mounting global economic uncertainties are likely the reason for this.

WATCH OUT LAZADA AND SHOPEE; TIKTOK SHOP IS NO LONGER JUST A SLEEPING GIANT

Dashveenjit Kaur | 1 June, 2023

E-commerce platforms in the region have also been investing in their offerings. This includes enhancing the customer experience as well as bringing in new features to the platforms to increase sales.

Currently, the top e-commerce platforms in Southeast Asia include Shopee, Lazada, Zalora, Tokopedia, Bukalapak, Carousell and Tiki. ByteDance’s TikTok Shop is currently the fastest-growing e-commerce player in the region, despite the challenges the company faced in 2023 in Indonesia.

According to reports, around 30% of Lazada’s employees will be laid off.

Layoffs in the e-commerce industry

Despite its success, the e-commerce industry was not spared from layoffs. In 2023, almost all e-commerce platforms in the APAC region reduced their headcount. While competition has been regarded as the main reason, the increasing use of technology like AI in some roles has also contributed to the number of layoffs.

While it is only the beginning of 2024, Lazada has already made headlines for its drastic job cuts around Southeast Asia. According to a report by CNBC, Lazada employees from all levels across the region are affected. The same report claimed that hundreds could be affected – with the Singapore branch being the most impacted.

A spokesperson for Lazada Singapore did not confirm the layoffs but told CNBC that the company is “making proactive adjustments to transform its workforce, to better position itself for a more agile, streamlined way of working to meet future business needs.”

The layoffs – or “proactive adjustments” – at the e-commerce giant also came as a shock to the employees. According to reports, many employees were caught off guard by the announcement. Lazada currently has around 10,000 employees in the region.

Singapore’s CNA reported that Lazada Singapore had retrenched some workers last year, but that it was usually just a few people or a particular department that was affected. This time, staff from all parts of the company – and at all levels – have been affected.

Three employees who spoke to CNA described the layoffs as “unfair,” “opaque,” and “baffling,” adding that it has caused much anxiety and speculation among their colleagues due to the lack of transparency. They also said that the severance package was lower and worse than other tech companies such as Shopee and Grab offered to their employees who were laid off last year.

Lazada has already made headlines for its drastic job cuts around Southeast Asia. (Image by Shutterstock).

What caused layoffs in Lazada?

E-commerce platforms continue to evolve, offering new features and improving customer experiences. However, that’s not the case with Lazada, which is also one of the reasons why the app has been losing out to its competitors.

For example, Lazada’s main competitors – Shopee and TikTok Shop use shoppertainment as a means to boost their sales compared to Lazada. While the Lazada e-commerce app does support live broadcasts for sales and even has gamification features like those of its competitors, the response to them on Lazada has not been as great as it has been on some of those rival platforms.

At the same time, most e-commerce platforms today offer buy now pay later (BNPL) services, something that Lazada has yet to offer to its customers. For example, Shopee has its own BNPL offering, while other e-commerce platforms like Zalora partner with BNPL providers to give customers more payment options.

Alibaba Group has invested an additional US$634 million in Lazada to intensify its battle with its competitors in the region. (Image by Shutterstock).

Alibaba has bigger plans?

The biggest possibility of the layoffs would be in the group’s management and direction as well. Lazada is a subsidiary of the Alibaba Group. The Alibaba Group has experienced a tumultuous 12 months. First, the group called off big plans for its cloud computing unit in November 2023. The group’s market value has also fallen drastically in the last three years.

Interestingly, in December 2023, Alibaba Group also invested an additional US$634 million in Lazada to intensify its battle with its competitors in the region. So, if the parent company has invested heavily in Lazada, then why is it conducting layoffs?

LAZADA: ONLINE SHOPPING INTEGRAL TO EVERYDAY LIFE

Dashveenjit Kaur | 23 March, 2022

According to a report by The Financial Times, company insiders and analysts said that Alibaba has so far failed in combating aggressive new competitors effectively, keeping abreast of AI developments and capitalizing on its strengths in domestic e-commerce to succeed in Western markets.

The Financial Times also spoke to nine Alibaba employees, who painted a picture of a flailing enterprise trying to chart a new course after canning crucial planks of an ambitious restructuring plan that was supposed to revive its fortunes.

It remains to be seen what other plans Lazada has for its e-commerce journey beyonf these layoffs. But one thing is certain: the e-commerce industry remains a highly competitive and profitable industry, and without the right formula for success, platforms like Lazada may take longer to be as successful as their competitors.

Apart from Lazada, in 2023, Shopee laid off around 500 employees in its Indonesia unit, while Tokopedia saw around 600 employees laid off in the country. Zalora, by contrast, has been able to maintain its workforce and remain profitable despite the increasing competition.

The post Lazada layoffs: does Alibaba have a bigger plan for e-commerce? appeared first on Tech Wire Asia.

While there’s no shortage of uncertainty as we countdown to 2024, the crystal ball seems to have a few things in focus for the next trip around the sun. From the long-anticipated shift from third-party cookies, to first-party data to the harnessing of AI, and the evolution of e-commerce, here are five key tech trends set to shape how brands connect with customers.

The race for first-party data

2024 is set to be the year of first-party data with Chrome deprecating third-party tracking cookies over the year, following the lead of other browsers having already implemented similar changes. Brands will be focused on strategies to build their valuable first-party data, built up from purchasing signals tracked via loyalty programs, registered users, CRM, and so on.

E-COMMERCE: PROVIDING CUSTOMERS THE BEST GIFT THEY COULD ASK FOR

Tech Wire Asia | 31 January, 2023

Brands will turn to publishers to harness their vast contextual and enriched datasets from either registered users or gleaned from the type of content being consumed in real time. Combinations of both publisher and advertiser data via data cleanrooms have been a topic of interest and it will be interesting to see how this is picked up over the year.

The shift promises contextual interest targeting, enabling a more precisely tailored match for brands between creative and audiences. The focus on sharper targeting will help reach the right audience with specific intent, ultimately leading to increased conversion rates and effectiveness.

Focus on innovative advertising

Harley Ramien, Director, Asia Pacific, Bonzai

The adoption of more premium and effective ad solutions is a growing trend, which is only set to continue from an effectiveness and user experience perspective. Clients are reporting that campaign budgets can be extended up to seven times just by using more effective formats.

Brands demand more premium sponsorship opportunities and publishers are accommodating via a range of high-impact and bespoke formats. This means more curated and higher quality ad experiences on-site, resulting in a longer-lasting impact, from awareness to engagement through to conversion. We’re seeing further development toward solutions that overlay first-party data or contextual insights with premium ad formats. This delivers more personalized and relevant experiences, which are particularly effective for e-commerce.

As smartphone user numbers worldwide reach an estimated 4.6 billion, likely to surpass 5.1 billion by 2028, mobile internet traffic already claims nearly 60% of total web traffic. In response to this growth, there’s a need for a more expansive, premium mobile ad format that would extend the in-ad experience via a seamless, scrolling user experience. This would also drive brand awareness and communicate additional product information in an unobtrusive, impactful way.

Innovative new ad formats like BrandStory outshine competitors with triple the ad space and 2.8 times greater time in view than single-scroll ad formats. This addresses the demand from brands worldwide for more real estate that drives real results by seamlessly intertwining awareness, exploration and action in one comprehensive solution.

E-commerce to continue upward trajectory

We’re witnessing the takeoff of e-commerce across the board, supercharged from the shift during lockdown when businesses of all sizes realized the value of having a direct relationship with their consumers. On top of the sales, e-commerce lets advertisers own the data relating to the customer and the sale; a huge factor in the boom.

E-commerce will see sustained growth as brands demonstrate a willingness to invest in channels that streamline the conversion process and build a direct line to their customers. We’re seeing a take-up of in-banner transactions, shoppable video, contextual targeting and dynamic e-commerce ads that play a pivotal role in the transformation.

E-commerce will see sustained growth as brands demonstrate a willingness to invest in channels that streamline the conversion process and build a direct line to their customers.

Harnessing AI

AI is quickly moving from a novelty to being embedded in a multitude of platforms to increase effectiveness and revolutionize the landscape, for the overall marketing function and the specific ways we engage with technology. This includes content creation and messaging to get a better handle on insights and planning, particularly leveraging the abundance of first-party data. The wealth of information from this data will serve as a fertile ground for extensive learning and the development of models tailored to audience insights.

Surge in digital outdoor and connected TV channels

In the coming year, brace for a significant expansion in alternative advertising channels, particularly digital outdoor and connected TV. We anticipate substantial growth and innovative strategies as these channels evolve to become pivotal players in the advertising landscape. We have seen clients connecting their digital out-of-home and digital display campaigns with live data, meaning interactions with the digital campaign can be relayed to out-of-home screens – another space to watch.

The future of consumer-driven digital experiences

As we step into 2024, the world of advertising will present some exciting opportunities for publishers, advertisers, and consumers alike. The strong focus on first-party data, the use of AI, the evolution of online shopping, the rise of different advertising channels, and the march toward new ad formats paint a picture of innovation, integration and adaptability. It’s a call for advertisers and publishers to work together, align their strategies with what consumers look for and create a landscape where creativity, data insights and modern technology come together for a more engaging advertising experience.

About the author

Harley Ramien, Director, Asia Pacific, Bonzai

Harley Ramien is a highly experienced professional in the fields of creative technology and advertising, with more than 14 years in the industry. He consistently delivers exceptional results for some of the world’s major brands. As the Director for the Asia-Pacific region at Bonzai, Ramien plays a pivotal role in guiding the company toward continued success, pushing boundaries and driving ongoing success for Bonzai’s partners in the region.

About Bonzai

Bonzai is a Creative Automation Platform that enables marketers and designers across the globe to build personalized creatives across channels, formats and screens. Since 2013, the Bonzai platform has been using cutting-edge technology to simplify the creative production process for customers such as News Corp, The Guardian, Nine Entertainment and direct-to-consumer brands. Bonzai’s self-serve product helps its users become more productive and agile in generating creative content, and win customers with relevant digital marketing.

Bonzai is headquartered in Singapore, with offices in Sydney and Pune, India. For more information visit www.bonzai.co.

The post AI, e-commerce and advertising: Key trends you need to know appeared first on Tech Wire Asia.

TEMU IS PAYING A HEFTY PRICE TO RIVAL SHEIN, AMAZON, AND TIKTOK SHOP THIS HOLIDAY SEASON

Dashveenjit Kaur | 24 November, 2023

In a sudden twist of events roughly two months ago, TikTok, the widely embraced social media platform from China’s ByteDance, temporarily suspended its e-commerce services in Indonesia. The decision was prompted by regulatory mandates instituted by the Indonesian government to protect local merchants’ interests.

Fast forward to this week, and TikTok has orchestrated a remarkable strategy in the archipelago, unveiling plans to invest over US$1.5 billion and secure a 75% stake in Tokopedia, the nation’s largest e-commerce platform. 

TikTok’s decision to temporarily shut down its e-commerce services in Indonesia reflects the complex interplay between regulatory compliance, market dynamics, and strategic investments. But the social media giant did say it would recalibrate its approach to navigate the evolving regulatory landscape.

That said, the strategic move to collaborate with Tokopedia underscores TikTok’s commitment to the Indonesian market. It allows the company to continue its ‘Shop’ operations, showcasing the platform’s resilience in navigating regulatory challenges.

Indonesia’s Trade Minister Zulkifli Hasan poses during the launch of social media video sharing app TikTok and Indonesia’s leading e-commerce site Tokopedia’s Buy Local Campaign in Jakarta on December 12, 2023. (Photo by Yasuyoshi CHIBA / AFP).

The Indonesian government mandated TikTok to halt its e-commerce services temporarily in October this year; the move was solely to ensure a level playing field for local merchants and protect their interests within the fiercely competitive e-commerce sector.

For TikTok, it was a detrimental move, especially for TikTok Shop, considering Southeast Asia is the app’s biggest market in terms of users, and Indonesia, the region’s biggest economy and most populous nation, is the most significant market for the platform. 

TIKTOK BOWS DOWN TO INDONESIA, SHUTTING ‘SHOP’ DOWN. WILL A NEW APP ARISE?

Dashveenjit Kaur | 5 October, 2023

In fact, Indonesia was so critical to TikTok’s plans that it was the first nation to pilot the app’s e-commerce arm, TikTok Shop. The country of 278 million people was supposed to be a template for a global expansion from the US to Europe. When talks on the new ruling were making waves, TikTok argued that separating social media and e-commerce would hamper innovation and hurt millions of merchants and consumers. 

According to the country’s Director General of Public Information and Communications of the Ministry of Communications and Informatics, Usman Kansong, Tiktok Indonesia has two permits from his ministry. “There are two permits: social media and e-commerce. But with Minister of Trade Regulation No. 31 of 2023, Tiktok must separate social media from e-commerce,” he added.

TikTok has a new strategy in Indonesia

The logo of Indonesia’s leading e-commerce site Tokopedia is seen during the launch of the Buy Local Campaign in Jakarta on December 12, 2023. (Photo by Yasuyoshi CHIBA / AFP).

When the ByteDance-owned TikTok unveiled its strategic move on Monday, it said the plan was to invest US$1.5 billion in a unit of Indonesia’s GoTo, aiming to salvage its shopping business following regulatory challenges in the country. In a letter to investors, GoTo said TikTok will secure a controlling 75.01% stake in Tokopedia, an e-commerce unit within the GoTo umbrella. 

As a part of this transaction, Tokopedia is set to acquire TikTok Shop’s Indonesia business for US$340 million, expanding its footprint in the dynamic Indonesian e-commerce landscape. “As part of the agreement, Tokopedia and TikTok Shop Indonesia’s businesses will be combined under the existing PT Tokopedia entity in which TikTok will take a controlling stake. The shopping features within the TikTok app in Indonesia will be operated and maintained by the enlarged entity,” GoTo’s statement reads.

The arrangement will allow TikTok and GoTo to serve Indonesian consumers and MSMEs comprehensively. “GoTo will benefit from the growth of the enlarged entity and will remain an ecosystem partner to Tokopedia through its digital financial services via GoTo Financial and on-demand services via Gojek. GoTo will also receive an ongoing revenue stream from Tokopedia commensurate with its scale and growth,” GoTo noted.

What will unfold next?

According to both companies, the strategic partnership will kick off with an initial pilot period conducted in close collaboration with and under the supervision of relevant regulators. The Beli Lokal initiative’s inaugural campaign is scheduled to launch on December 12, aligning with Indonesia’s National Online Shopping Day (Harbolnas) — a government initiative to foster the country’s digital economy by bolstering local MSMEs. 

TikTok pulls a power move in Indonesia.

“This campaign, accessible on both TikTok and Tokopedia, will spotlight a diverse array of merchants, placing a significant emphasis on Indonesian products. Going forward, TikTok, Tokopedia, and GoTo will transform Indonesia’s e-commerce sector, creating millions of new job opportunities over the next five years,” GoTo added. The transaction is expected to close in the first quarter of 2024.

The coming months will unveil how TikTok’s bold moves will shape the narrative of e-commerce partnerships and regulatory compliance in this dynamic market.

The post TikTok to revive its e-commerce in Indonesia with Tokopedia takeover appeared first on Tech Wire Asia.

Chinese fast fashion giant Shein has had quite the jounrey, from China to its current headquarters in Singapore, and in its latest evolution, aiming to file a US IPPO.

Founded by Chinese entrepreneur Chris Xu, within a decade of its inception, the company achieved a valuation of US$100 billion during an April 2022 fundraising round – a value higher than Zara’s owner Inditex and H&M combined. By 2022, Shein was the world’s third most valuable startup.

Fast forward to this week, when the fast fashion giant confidentially filed to go public in the US, one of its largest markets.

In May this year, the company experienced a valuation dip to slightly over US$60 billion, but if it goes ahead with its initial public offering (IPO), Shein is still on course to emerge as the most valuable China-founded company to go public in the US. So far, only Didi Global, the Uber of China, has come close, delivering one of the year’s biggest IPOs in 2021, at a US$68 billion valuation.

Shein faces the formidable task of convincingly assuring skeptical investors, politicians, and regulators that the controversies surrounding the company do not pose an impediment to its growth.

Still, the move to discreetly file for an IPO in the market from which it receives the most scrutiny is being seen as an audacious move by Shein. Around the world, the company has faced scrutiny for issues including reported subpar working conditions in factories, alleged copyright infringement concerning independent artists’ designs, and criticism of the environmental impact associated with fast fashion. Shein, however, has consistently refuted these accusations.

TEMU IS PAYING A HEFTY PRICE TO RIVAL SHEIN, AMAZON, AND TIKTOK SHOP THIS HOLIDAY SEASON

Dashveenjit Kaur | 24 November, 2023

In the US specifically, Shein is under constant, ongoing scrutiny – no matter what it does to stay on the good side of US lawmakers. Most recently, Shein and its rival Temu were accused of “building empires” by a US House committee in a report on firms exploiting legislative loopholes to evade US import taxes and sanctions checks.

Other concerns raised by critics center around the possibility that Shein might engage contract manufacturers located in China’s Xinjiang region, where advocates and governments have made allegations of the internment of Uighurs and other predominantly Muslim minority groups. Beijing, however, denies any such abuses.

Shein and its lobbying effort for its US IPO

Persuading regulators about the integrity of its supply chain is expected to be a significant regulatory hurdle for Shein as it seeks approval from the US Securities and Exchange Commission (SEC) for its IPO. Earlier this year, a bipartisan effort led by a congresswoman urged the SEC to postpone Shein’s IPO until the company’s supply chain could be verified free from forced labor. 

A man cleans the windows of the first permanent showroom of Chinese online fast fashion giant Shein in Tokyo. (Photo by Richard A. Brooks / AFP).

Additionally, a coalition of Republican attorneys general from 16 US states has called for an SEC audit of Shein. The company has faced scrutiny from two separate Congressional committees for its sourcing practices and utilization of a trade loophole that lets most of its products into the US duty-free.

In its latest social impact report, Shein emphasized its collaboration with Oritain, a firm employed by the US government to examine cotton connections to China’s Xinjiang region. As previously disclosed to Reuters, Shein conducts tests on samples from every third-party cotton mill with which it collaborates. Between June 1, 2022, and July 11, 2023, the company conducted 2,111 tests.

Nevertheless, critics argue that the testing procedures fail to adequately scrutinize the millions of garments Shein exports worldwide each year. A separate Reuters report noted that Shein allocated US$1.28 million for Capitol Hill lobbying this year in anticipation of its public debut. The company also engaged in private meetings with lawmakers, including prominent critics, aiming to reshape its image in Washington, as per insights from Congressional aides.

In addressing concerns about its supply chain, Shein representatives underscored the company’s commitment to diversifying its sourcing from China to include other nations, notably India. They also highlighted the company’s efforts to increase the number of Chinese goods coming to the US via conventional container shipping, acknowledging the payment of tariffs on these items.

“Shein is fundamentally a Chinese company; investors should approach Chinese offerings with extreme caution. Its attempt to go public should prompt a closer look at its business practices, especially its links to slave labor and its evasion of US customs laws,” Republican Sen. Marco Rubio told Reuters. “I will closely monitor Shein’s disclosures in the lead-up to its IPO,” added Rubio, who criticized the retailer’s lobbying efforts in a letter distributed to other senators in June.

The Wall Street Journal, the first to break the news on Shein’s IPO, said that Goldman Sachs, JPMorgan Chase, and Morgan Stanley have been hired as lead underwriters on the offering, which could happen in 2024.

How will Beijing treat Shein’s US IPO?

Since a broad crackdown on overseas listings, fewer Chinese IPOs have been in the US. As part of Shein’s ongoing efforts to prepare for its inaugural share sale in the US, the company strategically positions itself as a global entity despite its Chinese origins. It started in 2022 when Shein relocated its headquarters to Singapore and initiated the expansion of manufacturing facilities beyond its Chinese base. 

The e-commerce giant eventually established distribution centers in the US, Canada, and Europe to enhance shipping efficiency in these regions. Notably, the company acquired the British online brand Missguided in October and secured a stake in the fashion retailer Forever 21 owner in August.

A Shein pop-up store in Paris. (Photo by Christophe ARCHAMBAULT / AFP)

There remains the possibility that Chinese regulators will subject Shein’s listing to scrutiny and mandate the company to seek approval. After all, Chinese securities regulations necessitate companies to register for the sale of shares abroad, subjecting them to screening for state security and other potential concerns. Such regulatory processes could introduce further delays to Shein’s IPO proceedings.

The post Did Shein finally make the bold move and file for a US IPO? appeared first on Tech Wire Asia.

Over the past decade, Chinese consumers have gained a reputation for their unwavering passion for electronic gadgets, with mobile phones becoming an indispensable part of daily life. Apple, recognized for its performance and premium pricing, has enjoyed notable success in the Chinese market, particularly with the iPhone. It has seamlessly transformed a smartphone into a status symbol within the country’s social circles. However, a significant shift is underway as formidable domestic players Huawei and Xiaomi are rising to prominence. 

Armed with innovative features, competitive pricing, and diverse product offerings, these companies are reshaping the dynamics of the Chinese smartphone market and challenging Apple’s long-standing dominance. Smartphone sales in China surged by 11% compared to the previous year in the opening four weeks of October, giving a noteworthy indication of the market’s rebound from an eight-month decline. Even more notable though is the fact that leading domestic brands outpaced Apple in terms of growth during the period.

According to a report published by Counterpoint Research, Xiaomi, Honor, and Huawei Technologies were the main forces behind the growth in the Chinese smartphone market. Huawei saw sales rise 90% year-on-year (YoY) during the period. The increase in overall demand indicated that China’s smartphone market is close to exiting an extended slum.

APPLE: THIRD QUARTER OF DECLINING SALES BUT NEW HIGHS IN CHINA, INDIA

Dashveenjit Kaur | 7 August, 2023

Apple has been under pressure to meet demand for its new devices, all while Huawei and Xiaomi released their latest flagship smartphones. “The clear stand-out in October has been Huawei, with its turnaround on the back of its Mate 60 series devices,” Counterpoint China analyst Archie Zhang said in the report, referencing the Shenzhen-based company’s latest handsets launched in late August, including the Mate 60 Pro. 

Despite US sanctions intended to stifle access to such technology, that device is equipped with an advanced made-in-China 5G chip. On the other hand, Xiaomi’s latest flagship, the Xiaomi 14, released on October 26, experienced a 33% sales surge in China within four weeks. The company achieved over one million unit sales in under two weeks, as Xiaomi founder and CEO Lei Jun reported on Weibo. 

Despite receiving less media coverage than Huawei’s Mate 60 Pro, the Xiaomi 14 is notable for being the world’s first device powered by Qualcomm’s Snapdragon 8 Gen 3 chipset and running Xiaomi’s new Android-based operating system, HyperOS.

Apple vs. Huawei vs Xiaomi: who did it better for Singles’ Day?

Source: Counterpoint Research Smartphone 360 Weekly Tracker, China. (*2022 spans Oct 31 – Nov 13; 2023 spans Oct 30 – Nov 12.).

During this year’s two-week Singles’ Day sales event, smartphone unit sales in China grew by 5% YoY, indicating a positive fourth quarter, according to Counterpoint’s report. “This is a good start to the rest of the quarter,” says Mengmeng Zhang, senior analyst for China. “Huawei is continuing its strong run along with Xiaomi, which is enjoying a further spike in sales with the launch of its new 14 series devices.”

Apple appears to be struggling from hiccups regarding supply, Ivan Lam, senior analyst for manufacturing at Counterpoint, added. He added that Apple is improving compared to last year. “Considering last November’s supply snafu was an anomaly, the YoY numbers could move into positive territory as current supply tightness normalizes,” he concluded.

A man tries out a newly-launched iPhone 15 mobile phone at an Apple store in Hangzhou, in China’s eastern Zhejiang province on September 22, 2023. (Photo by AFP) / China OUT

In total, the number of Apple smartphones sold declined 4% YoY during the two-week sales from October 30 to November 12, the research consultancy said last Thursday. In comparison, the number of units sold by Huawei and Xiaomi grew 66% and 28% YoY, respectively, over the same period.

A Reuters report indicated that the price for Apple’s latest iPhone 15 model starts at 5,999 yuan (US$832), while Huawei’s Mate 60 smartphones start from 5,499 yuan (US$763). Xiaomi’s latest Mi 14 smartphone is priced at 3,999 yuan (US$555). E-commerce giants like Alibaba and JD.com refrained from disclosing Singles’ Day sales figures this year, continuing a practice adopted last year.

JD.com did share that the transaction volume for Apple products on its platform exceeded 10 billion yuan (US$1.39 billion). Meanwhile, Xiaomi reported a cumulative gross merchandise value of more than 22.4 billion yuan for the shopping event.

HUAWEI MATE 60 PRO: EVERYTHING WE KNOW ABOUT THE NEW 5G KIRIN CHIPSET

Dashveenjit Kaur | 4 September, 2023

Apple is navigating a fiercely competitive landscape in China’s smartphone market, especially since the launch of the iPhone 15 collection.

Traditionally a dominant player, the tech giant is now contending with challenges posed by formidable domestic rivals, reshaping the dynamics of the world’s largest smartphone market.

The post Surprising shift: Huawei and Xiaomi surpass Apple in China’s Singles’ Day sales appeared first on Tech Wire Asia.

Around 14 months ago, Temu was launched in the US as a rival to Shein, a Chinese fast-fashion giant dominating the global e-commerce market. Temu is owned by PDD Holdings, which also owns Pinduoduo, a Chinese online shopping app popular in China for its low prices and gamified features. Temu uses similar tactics, and the American market was its first major overseas push. 

A rapid expansion followed; today, Temu is available in 23 countries. By October 17, 2022, about one month after its launch, Temu became the most downloaded shopping app in the US. It was a notable feat for Temu to outperform Amazon, Walmart, and Shein shortly after entering a new market. The app debuted in the Japanese market in July and expanded to the Middle East through Israel and Southeast Asia via the Philippines in August. 

Temu’s app performance in 2023

By November this year, Temu had achieved 250 million downloads, as reported by Business of Apps. Today, Temu stands as the second most popular e-commerce app in the US, behind only Amazon Shopper, according to Similarweb estimates of monthly active users for iOS and Android combined. Temu is the tenth most popular app, trailing only apps operated by tech giants like Google and Meta-owned platforms.

Data from Similarweb shows that US web traffic to temu.com is up more than 1,000% year-over-year (YoY), reaching nearly 99 million visits per month as of September. Temu’s web traffic reached over 326 million trips globally, up more than 4,000% YoY. 

US CONTINUES ITS BEEF WITH CHINA: SHEIN AND TEMU ARE THE LATEST TARGETS

Dashveenjit Kaur | 18 April, 2023

As for conversion rate – the percentage of website visitors who make a purchase – Temu’s was at 4.6% in September this year, a little less than that of Shein (4.7%) but better than Forever 21 (3.6%) and ASOS (3.3%). No one, however, comes close to Amazon (11.8%). 

The sky-high spending by Temu to compete with Shein, Amazon, and TikTok Shop

Temu employs a strategy akin to Shein’s, providing substantial discounts through coupons, subsidies and considerable advertising spending. This approach generates favorable outcomes, at least in the immediate term, but may not be sustainable in many ways to compete with the likes of Amazon.

Source: Shutterstock

According to Meta, Temu has run over 50,000 global ads on its platforms this month alone, with posts in English and Chinese. However, its swift expansion has come with challenges. Sellers report that Temu is grappling with a logistics nightmare: limited warehouse capacity as it strives to fulfill orders and manage returns. 

As reported by business news site 36kr, the company had reached its storage limit in March, particularly after a surge in orders following its Super Bowl advertisement. Some sellers on the platform have encountered challenges shipping their products due to limited space at Temu’s premises.

To top it off, the company is still operating at a significant financial loss. As per the Chinese news outlet 36kr, Temu faces a loss of approximately 30-35% on each US order and an average of 40% on global rankings. Initially budgeting a net loss of 20 billion renminbi (US$2.76 billion) for 2023, the company has revised this figure to 23 billion renminbi (US$3.17 billion), as per 36kr.

Adding to that, Temu has invested substantial amounts to reach American consumers alone, according to various reports. In February 2023, the company reportedly spent US$14 million on two 30-second slots during Super Bowl LVII. Additionally, it allocates up to US$10 million daily for advertisements on Meta and Google, as per an analysis of Tencent. 

WHAT IS TEMU AND HOW IS IT TAKING OVER THE SHOPPING LANDSCAPE?

Muhammad Zulhusni | 27 October, 2023

The company is capitalizing on the “trading down” trend in American shopping, where consumers while maintaining spending habits, opt for value in lower-priced categories. A McKinsey Consumer Pulse Survey from April reported that 80% of respondents had altered their shopping behavior by trading down. 

But by the time Temu reached its first year of operations in the US, its rivalry with Shein had intensified, with the entry of TikTok Shop–also selling Chinese goods to the US and beyond. Shortly before that, in May, WIRED reported that Temu had broadened its demographic appeal, targeting buyers from higher-income segments and aiming to boost average order sizes, which stood at around US$25 then. 

The battle for sub-Amazonian supremacy continues.

Increasing order sizes is a strategy to improve the company’s chances of breaking even. After all, a considerable portion of Temu’s expenses is attributed to international shipping, as the company emphasizes free delivery on nearly all items as a key selling point. A source confirmed to WIRED that the average order size in the US has increased to US$37 as of November, although Temu did not provide an official comment on this figure.

WIRED’s analysis earlier this year also shows that Temu incurs approximately US$10 in shipping and handling expenses per package. This includes US$1 for moving items from sellers to warehouses in China and US$5 for shipping from those warehouses to foreign countries. “Analysts anticipate that this cost is likely to rise,” an article from WIRED reads.

Gearing up for the holiday season sale

The immense scope of Black Friday positions it as a battleground for intense competition among e-commerce brands. Deloitte forecasts a 10.3 to 12.8% growth in e-commerce sales during the 2023-2024 US holiday season, potentially reaching US$284 billion.

In 2022, Temu made a splash with Black Friday deals, including a 30% discount on users’ initial orders, catapulting it to the summit of Apple’s App Store. According to discussions obtained by WIRED from a Temu seller WeChat group, the platform has been strategically laying the groundwork for this year’s year-end sales since August. It has been recruiting sellers in China to prepare Christmas gifts and decorations. 

According to WIRED, the company even conducted a conference on November 9 to help sellers in gearing up and planning for the approaching Black Friday and Christmas season. What remains a harsh truth is that although Temu and Shein are offering deals for cheap goods for the holiday shopping season, in terms of turning visits into actual sales, they still far lag behind market leader Amazon.com.

In October, Shein’s website attracted 28.6 million unique monthly visitors, marking a 7.25% increase from the previous year, as reported by Similarweb. But the conversion rate from website visits to actual transactions declined from 4.6% to 4.1% YoY. Meanwhile, Temu experienced substantial growth, reaching 42 million unique monthly visitors in October 2023, quadrupling its numbers from the previous year. 

Nevertheless, only 4.5% of these visits translated into actual transactions. On the other hand, Amazon outperforms both online retailers, as its data reveals that 56% of its 268 million unique monthly visits in October resulted in purchases. But the Temu app overtook eBay in Europe in October, hitting 51 million monthly active users across Android and Apple devices, according to data.ai.

It will clearly take a lot for Temu to outperform Amazon, but the chances of it catching Shein are much higher. It looks set to maintain its dominance in higher-value transactions, but is expected to face growing competition in the space of more affordable items. 

In Europe, the Temu app overtook eBay. Source: Data.ai

The post Temu is paying a hefty price to rival Shein, Amazon, and TikTok Shop this holiday season appeared first on Tech Wire Asia.