Shein and Temu are two Chinese platforms that have become significant players in the global e-commerce market in just a few years. Both companies built their competitive edge from the start with ultra-low prices, fast production cycles, and effective marketing strategies, which have allowed them to gain immense popularity among younger consumers, especially in the United States.

Shein, founded in 2008, initially specialized in women's clothing. Thanks to its extreme fast fashion (often referred to as "real-time retail"), the brand was able to introduce thousands of new products weekly. It was supported by advanced trend analysis systems that allowed it to quickly respond to market needs. Meanwhile, Temu, owned by PDD Holdings (operator of the Pinduoduo platform), has been developing as a marketplace since 2022 , offering a wide range of products—from clothing to electronics and home goods—at extremely attractive prices thanks to direct supply from Chinese manufacturers.

Why is changing your advertising strategy important?

Both brands invested heavily in marketing campaigns in the US market. Their efforts included a strong social media presence, search engine advertising, influencer partnerships, and even expensive television ads—including during events like the Super Bowl. This strategy aimed to quickly build brand recognition and capture the largest possible market share.

However, the dynamics of the US e-commerce market, rising customer acquisition costs, intensifying competition, and regulatory challenges (e.g., political pressures related to company origins) led Shein and Temu to seek new growth opportunities. Europe, with its large and diverse consumer market, became a natural destination for further expansion.

The decision to reduce advertising budgets in the US and shift them to Europe is not only a response to current challenges but also signals a broader shift in the global strategy of both companies. It has implications for both competitors and the entire e-commerce ecosystem, demonstrating how dynamically these companies can adapt to changing market conditions.

A brief description of Shein and Temu

Shein – the global leader in online fast fashion

fast fashion clothing and accessories since its inception . The brand was founded in 2008, and its dynamic growth began a few years later thanks to the skillful use of two key factors: a flexible supply chain and advanced trend analytics .

The company has become a symbol of modern online fashion retail, offering thousands of new products weekly. Shein operates on an on-demand production model, analyzing search, social media, and sales data to rapidly introduce new collections. Its primary channels for reaching customers are a mobile app, an online platform, and extensive social media campaigns (TikTok, Instagram).

In recent years, Shein has become one of the most downloaded online stores in the world , especially popular among young consumers (Gen Z and millennials) who are looking for fashionable products at a low price.

Temu – an aggressive player with an offer "everything for everyone"

Temu is a relatively new brand on the international market. It belongs to the Chinese giant PDD Holdings , best known as the operator of the popular Pinduoduo platform. Temu launched its US operations in 2022, and its business model is based on offering a wide range of products directly from Chinese manufacturers. Temu's strategy is "ultra-low prices by minimizing margins and intermediary costs .

From the outset, Temu launched an intensive marketing campaign to gain recognition in the highly competitive US market. The company employed aggressive promotional strategies, offering discount coupons, free shipping, and spectacular television ads, including during the Super Bowl.

Temu's product range includes not only clothing but also electronics, gadgets, home accessories, and many other categories. This means the platform competes with both giants like Amazon and eBay, as well as smaller marketplaces and specialized services.

Common features of both brands

Although Shein and Temu differ in terms of their offerings, both companies share several key elements:

• origin and operating model - both brands use an extensive network of Chinese manufacturers and suppliers, which allows them to minimize costs;
  
  
• global scale of operations - both companies aim to rapidly develop in many markets simultaneously, using digital sales and promotion channels;
  
  
• Intensive marketing presence – both Shein and Temu invested huge resources in acquiring customers in the US, using modern forms of advertising (social media, influencer marketing, advertising during major media events).
  
  

The change in the advertising strategy of these brands is a signal that they have recognized new priorities and potential in other markets – especially in Europe, where the competition for consumers is only just heating up.

Market Context: Why Changing Strategy Matters

The global e-commerce market is changing rapidly, and the situation of Shein and Temu is a prime example. Both brands have gained a significant market share in the United States over the past few years, but their continued growth in the region faces increasing challenges. The shift of advertising budgets to Europe is not only a result of assessing the potential of new markets but also a response to growing barriers in the US.

First, the American e-commerce market is becoming increasingly saturated. Customer acquisition costs are rising, and competition between platforms is exceptionally fierce. Consumers can choose from global giants like Amazon, as well as local brands that effectively build customer loyalty by offering fast delivery, easy returns, and high-quality service. Despite attractive prices, Shein and Temu are finding it increasingly difficult to maintain their growth rate amid such high marketing costs and pressure on margins.

Secondly, significant political and regulatory challenges are mounting. In the United States, concerns about data security, production conditions, and the impact of Chinese platforms on the domestic labor market and industry are increasingly being raised. Shein and Temu have come under scrutiny from regulators, and some politicians are openly demanding stricter regulations for Chinese companies operating in the American market. This not only increases the risk of doing business in the US but also negatively impacts the image of both brands.

Europe, on the other hand, is emerging as a region with significant growth potential. Although the European e-commerce market is also mature, it is characterized by greater fragmentation and diversification across countries. This creates opportunities to gain market share through aggressive pricing campaigns and flexible adaptation of offerings to local needs. Furthermore, Europe has not yet engaged in such an intense public debate about the threats posed by Chinese e-commerce platforms, meaning less political risk in the short term.

The shift in Shein and Temu's advertising strategy is an example of how global e-commerce platforms are adapting to changing economic, political, and consumer conditions. It also signals to competitors and industry players that a successful international presence requires not only an attractive product offering but also flexibility in building a marketing strategy.

US Advertising Strategy to Date

In recent years, Shein and Temu have pursued an exceptionally aggressive marketing strategy in the United States. Their primary goal was to quickly build brand recognition, gain consumer trust, and capture the largest possible share of the rapidly growing e-commerce market. This strategy was made possible by massive advertising budgets and an innovative approach to promotion, which clearly distinguished these platforms from traditional players.

Scale of marketing activities

Both platforms invested hundreds of millions of dollars annually in promotional activities in the American market. Shein consistently ranked among the largest digital advertisers in the US, focusing on social media campaigns and mobile apps. Despite its shorter market presence, it quickly matched this level of intensity—according to analyst estimates, the company spent over $1 billion on marketing in the US during its first year of operation.

Advertising spend spanned both digital and traditional channels. Both brands were visible on billboards, in television commercials, and even during major sporting and entertainment events. The most spectacular example was Temu's Super Bowl campaign—one of the most expensive advertising slots in the world—which cost the company tens of millions of dollars but provided an immediate boost in brand recognition.

Channels used by Shein and Temu

The advertising strategy of both platforms was based on several main pillars:

Social media and influencer marketing

From the outset, Shein and Temu prioritized a presence where their core customers hang out—on social media. Shein built a strong presence on platforms like TikTok, Instagram, and YouTube, collaborating with hundreds of influencers and micro-influencers. Their role was not only to promote products but also to create content like "hauls" and "unboxings," which quickly went viral.

Temu employed a similar tactic, additionally offering app users attractive rewards for recommending the app to friends, which enabled the rapid growth of its user base. Viral campaigns and referral systems became an important element in building reach at a relatively low cost per user.

Digital and programmatic advertising

Both brands utilized advanced advertising systems to target users across search engines, ad networks, and mobile apps. Shein and Temu ran performance marketing campaigns focused on conversion—leading to app downloads or purchases as quickly as possible. Their ads were present almost everywhere: from Google Ads and Facebook Ads to programmatic display in entertainment and news apps.

Traditional media and major events

Although the primary focus was on digital marketing, Shein and Temu also invested in traditional advertising. A presence on television, billboards, and in print helped build brand credibility and reach a broad consumer base that might not be active on social media. Such efforts were particularly visible during key media events, such as the Super Bowl and music awards.

Results and challenges in the US market

The aggressive marketing strategy quickly yielded results. Shein became one of the most popular shopping apps in the US, and Temu became one of the most downloaded e-commerce apps just a few months after its debut. Both brands gained a huge customer base, luring them with low prices and attractive promotions.

However, success came at a price. First, the customer acquisition cost (CAC) for both platforms rose significantly with increasing competition and market saturation. Maintaining a leading position in search results and social media feeds required increasingly larger financial outlays. Second, the aforementioned political and regulatory barriers emerged. Pressure from public opinion and politicians led to Shein and Temu being perceived as controversial brands, which could influence the purchasing decisions of some consumers.

It is these factors that have led both companies to rethink their advertising strategy and shift their attention to other markets, including Europe, where growth potential remains high and marketing costs – at least for now – are more competitive.

New Direction: Europe in the Crosshairs

Shein and Temu's decision to shift a significant portion of their marketing budgets from the US to Europe is no accident. It's the result of careful calculation and a strategy adapted to changing market and political conditions. Europe now emerges as a market with significant growth potential, less saturated than the US, and offering new opportunities for both platforms to build their position. Shein and Temu plan not only to increase advertising spending on the Old Continent but also to reshape their operations, adapting them to local expectations and realities.

Factors behind the decision to reallocate budgets

The first significant reason for the shift toward Europe is the growing saturation and cost of marketing activities in the US . High competition, increasingly expensive performance marketing campaigns, and the inflation of digital advertising costs have made acquiring new customers in the United States increasingly unprofitable. Added to this are political challenges: escalating tensions between the US and China, increasing regulatory scrutiny, and public concerns about data security and the impact of Chinese platforms on the local economy. Shein and Temu see Europe as an opportunity to diversify their operations and become independent of the US market for growth.

The second factor is the structure of the European e-commerce market , which favors business models like Shein and Temu. Although Europe is a mature e-commerce market, it is more fragmented than the US. The lack of a single dominant player (on the scale of Amazon in the US) across the European Union opens up space for new platforms that can quickly adapt to local needs. Furthermore, European consumers—especially in southern and eastern countries—are highly price-sensitive and eager to take advantage of shopping opportunities, which aligns perfectly with the pricing strategies of both brands.

Main target markets in Europe

Shein and Temu don't plan to operate uniformly across Europe—their strategies involve diversifying their operations by country. Their list of priority markets includes:

• Germany – the largest e-commerce market in the EU, with high consumer purchasing power and great openness to online shopping.
  
  
• France – a market with great potential in the fashion and lifestyle products segment, where Shein has already built significant recognition.
  
  
• Spain and Italy – markets characterized by high price sensitivity and a dynamically growing share of e-commerce.
  
  
• Central and Eastern Europe (Poland, Romania, Czech Republic) – regions with rapidly growing e-commerce penetration, where consumers are eager to test new platforms offering low prices.
  
  

The United Kingdom is also important, as despite Brexit it remains one of the most important markets for online sales in Europe.

Forecasted marketing activities

Shein and Temu don't intend to replicate the exact advertising model they used in the US in Europe. Instead, they plan more diverse and locally tailored campaigns , combining aggressive promotions with brand-building activities. The anticipated elements of the strategy include:

• cooperation with local influencers - instead of global brand-influencer campaigns, the emphasis will be on cooperation with creators known in individual markets, which will allow for better meeting the tastes and expectations of consumers;
  
  
• greater emphasis on communicating quality and transparency – to counter potential allegations of low quality or unethical production conditions, Shein and Temu may begin to more clearly display quality certificates and supply chain information;
  
  
• regional campaigns – investing in advertising tailored to the specific needs of each country, taking into account the language, culture and key local events;
  
  
• development of logistics facilities - in order to compete effectively in Europe, brands plan to increase the presence of warehouses and distribution centers on the Old Continent, which will shorten delivery times and increase consumer confidence.
  
  

Shein and Temu hope that thanks to these activities they will not only be able to acquire new customers, but also build more lasting relationships with European consumers than in the American market, where intensive advertising was often the only magnet attracting users.

Consequences for the e-commerce market

The shift of Shein and Temu's advertising budgets from the US to Europe will have significant consequences not only for the brands themselves but also for the entire European e-commerce market. These platforms' new strategies could impact competitive dynamics, the strategies of other players, and even consumer behavior and expectations. These changes are worth analyzing from the perspective of both local companies and global giants operating in Europe.

How the strategy change will affect competition in Europe

The entry of Shein and Temu into Europe with the full force of their marketing budgets means the competition for customers is intensifying. Their aggressive pricing policies and intensive advertising campaigns will force local and regional players to reassess their strategies. Possible consequences include:

• price wars - the presence of two platforms offering products at exceptionally low prices may force competitors to reduce margins or intensify their own promotions, which in the long run may negatively impact the profitability of the entire industry;
  
  
• greater investment in marketing – European companies that have so far operated mainly on the principle of stable growth and building customer loyalty will have to increase spending on advertising and performance activities to maintain market share;
  
  
• pressure to innovate in customer service - price competition from Shein and Temu will force other players to seek advantages in other areas: faster deliveries, better after-sales service, simplified returns procedures or additional services (e.g. personalization).
  
  

Possible consequences for platforms such as Amazon, Zalando and Allegro

For the largest platforms operating in Europe, the shift in focus from Shein and Temu poses a significant challenge. Amazon , which dominates many European markets, will have to further emphasize service quality, delivery speed (Amazon Prime), and product range breadth to maintain its competitive price position.

Zalando , as a leader in online fashion, may feel the most pressure from Shein, a direct competitor in the category. This could force Zalando to intensify its efforts in the areas of sustainable fashion, quality, and supply chain transparency—elements that are becoming increasingly important to European consumers.

Allegro , the market leader in Central and Eastern Europe, will also have to react to the new situation, especially since Temu will likely invest heavily in regions such as Poland and the Czech Republic, where consumers are particularly price-sensitive.

Impact on customers and suppliers

For consumers, the entry of Shein and Temu, with their large marketing budgets, could mean greater access to affordable products , which will certainly be perceived as beneficial in the short term. Customers will have more choice, and intense competition could translate into lower prices, more frequent promotions, and more flexible shopping conditions.

However, the effects for European suppliers and producers may be less positive. The growing popularity of Asian platforms could lead to the further marginalization of local brands and producers , who are unable to compete on price with Shein or Temu. Furthermore, these platforms rely on direct deliveries from Chinese producers, which could limit orders fulfilled by local distribution centers and wholesalers.

In the long term, there is also a risk that excessive price pressure will lead to a deterioration in the quality of products available on the market and increased problems with complaints and after-sales service – areas that are already the Achilles heel of cross-border shopping.

The Changing E-Commerce Landscape in Europe

In summary, the shift of Shein and Temu's budgets to Europe marks the beginning of a new phase in the development of e-commerce on the Old Continent. In the coming years, we can expect greater dynamics in marketing activities, an increasing importance of price in consumer purchasing decisions, and a more intense fight for customer loyalty. This will be a testing period for the entire industry: which companies can best adapt to this new, more competitive environment?

Opportunities and threats of the new strategy

Shifting Shein and Temu's advertising budgets to Europe offers both platforms significant growth opportunities, but it also carries significant risks. Their success in Europe will depend on their ability to leverage competitive advantages and overcome the barriers inherent to this market. It's worth analyzing the potential opportunities and threats associated with these companies' new strategies.

Benefits of expansion in Europe

One of the key opportunities is access to a large and diverse customer base . Europe is a market of over 500 million people, with a well-developed e-commerce infrastructure and a steadily growing share of online sales. Despite this market's sophistication, there are still countries and segments where e-commerce penetration is relatively low, and consumers are open to new platforms offering attractive prices.

Shein and Temu can also benefit from the fragmentation of the European market . The lack of a single dominant player across the European Union (like Amazon in the US) makes it easier to gain market share in individual countries by adapting their offerings and marketing communications to local conditions. For example, a strategy effective in Italy may look completely different than in Germany or Poland, allowing companies to flexibly respond to market needs.

The attractive pricing of also presents a significant opportunity . European consumers—especially in times of economic slowdown and high inflation—are increasingly seeking bargain prices. Both platforms can leverage their cost-effectiveness and extensive access to low-cost production in China to attract large customer bases in markets with lower purchasing power (e.g., Central and Eastern Europe).

Regulatory, logistical and cultural barriers

One of the main threats to Shein and Temu in Europe is complex legal regulations and EU requirements . While companies struggled with political challenges in the US, in Europe they face bureaucracy and stringent standards in consumer protection, environmental protection, and personal data protection (e.g., GDPR). Complying with these requirements may require additional investment and increased operating costs.

Logistics and delivery times are also a significant challenge . European consumers are increasingly demanding in this area—accustomed to the fast deliveries offered by local market leaders (e.g., Amazon Prime, Allegro Smart, and Zalando). Shein and Temu will need to expand their local warehouses and distribution centers to meet these expectations. Delays in deliveries or issues with returns processing can quickly erode brand trust.

Cultural and linguistic differences also must be taken into account , requiring localization of marketing communications, customer service, and product offerings. Attempting to implement a uniform strategy across the continent can be disastrous. Failure to properly tailor a campaign to the specific needs of a given country (e.g., failure to consider local holidays, shopping habits, or ethical sensitivities) risks compromising credibility.

Risks related to limiting investment in the US

Shifting budgets to Europe also means a reduction in marketing activity in the US , which could weaken its position in the local market. Reduced visibility in digital and traditional advertising will mean consumers may switch to competitors more quickly, especially since the US market abhors a vacuum. Amazon, Walmart, and local fashion brands will eagerly seize any opportunity to regain market share previously lost to Chinese platforms.

Additionally, the reduction in investment in the US may make it more difficult to return to this market in the future if political and regulatory conditions improve. Rebuilding brand awareness and customer loyalty will be costly and time-consuming, especially after a period of reduced activity.

Balance of opportunities and threats

Shein and Temu's new strategy opens up vast opportunities for expansion in Europe, but it also presents them with a number of challenges that could determine success or failure in this market. A key factor will be whether the companies can adapt their operational, logistics, and communication models to local realities and meet the expectations of European consumers, who increasingly prioritize quality, speed of delivery, and social responsibility.

Applications for e-commerce companies

The shift in Shein and Temu's strategy—shifting advertising budgets from the US to Europe—is not only a significant event for the brands themselves, but also a warning sign and challenge for all e-commerce companies operating on the Old Continent. The new situation requires competitors to be flexible, react quickly, and rethink their existing business models. For many companies, this could be the impetus to introduce innovations that will determine their market position in the coming years.

How competitors can respond to Shein and Temu's move

E-commerce companies operating in Europe must prepare for greater pricing pressure and an intensified battle for consumer attention and loyalty. Possible defense and adaptation strategies include:

1. Strengthening their quality advantage.
   Shein and Temu rely on low prices and a wide selection. Local and regional brands can focus on emphasizing product quality, better adaptation to consumer needs, and ethical origins. Supply chain transparency, sustainable production, and quality certifications will become increasingly important, especially in the fashion and lifestyle segment.
2. Investing in Customer Service and Logistics:
   Fast and hassle-free delivery, easy returns, and high-quality customer service can become key differentiators for local players. Amazon, Zalando, and Allegro already offer extensive loyalty programs and lightning-fast deliveries (Prime, Smart, Plus). Smaller platforms should also consider developing such services to meet the expectations of increasingly demanding customers.
3. Building loyalty and personalizing offerings:
   Companies must focus on building lasting relationships with customers through loyalty programs, personalized product recommendations, and tailored communication. In times of increasing price competition, a competitive advantage can lie in the ability to create added value that cannot be easily replicated.
4. Actively Communicating Brand Values:
   European consumers are increasingly socially and environmentally conscious. Companies operating on the continent should more strongly communicate their values: localness, supporting the local economy, reducing carbon footprint, and social responsibility. This can become a crucial element in building customer trust and loyalty.

The importance of flexibility in e-commerce marketing strategy

Shein and Temu's entry into the European market with a larger advertising budget demonstrates the importance of marketing strategy flexibility . E-commerce companies should be prepared to quickly adapt to changing market conditions and the emergence of new, strong competitors. This means:

• ongoing monitoring of trends and competitor activities,
  
  
• dynamic management of marketing budgets (moving funds between channels and markets),
  
  
• willingness to test new advertising formats and channels of reach,
  
  
• developing competencies in data analytics to better understand consumer behavior and the effects of marketing activities.
  
  

New standards in e-commerce

The Shein and Temu movement challenges the entire industry to redefine the standards of competition. Consumers may begin to expect not only low prices but also an increasingly better shopping experience—fast delivery, transparency, convenience, and social responsibility. Companies that fail to keep pace with these changes risk losing market share.

For many brands and platforms, the entry of Shein and Temu into Europe will not only be competition for customers, but also an opportunity to rethink their own business models and build a more lasting position that is more resistant to change.