Despite being the most downloaded iPhone app in Australia last year, Temu’s future looks uncertain. AFP
A new research has revealed that Chinese online retailers Shein and Temu are expected to lose customers in 2025, as Australians become more doubtful about their products’ quality.
Shein and Temu quickly gained popularity in Australia with their low prices and heavy advertising, especially as people looked for cheaper shopping options due to rising living costs.
However, recent findings from e-commerce group Pattern Australia showed that only 12% of consumers trust Temu for its product quality, predicting a 7% drop in customers. Shein also faced a similar issue, with just 11% of shoppers trusting the brand.
Despite being the most downloaded iPhone app in Australia last year, Temu’s future looks uncertain. Only 43% of consumers are likely to buy from Temu in 2025, and this number may drop unless quality and delivery improve.
After 18 months of Australian consumers trying out Shein and Temu, early adopters are expressing growing dissatisfaction with the reliability of these Chinese marketplaces, according to Pattern managing director Merline McGregor.
Despite the initial excitement, many shoppers have found the quality of products and delivery times to be unreliable, leading to a decline in customer trust, she pointed out, reported The Nightly.
“Early adopters have found these marketplaces unreliable. Although they may still expand in the future, Temu and Shein face a significant challenge in legitimising themselves within the Australian market and delivering on the customer experience,” McGregor said.
The competitive landscape is shifting, with the rise of Shein and Temu impacting local brands like Oroton and Mosaic Brands. Wesfarmers shut down its marketplace, Catch, after failing to compete with international players. Also, eBay and Kogan have seen a decline in market share as consumer preferences continue to evolve.
In FY24, Catch posted a loss of AU$96 million, which included AU$23 million in restructuring costs and a non-cash impairment to its brand value. The company also saw its gross transaction value drop by 28.5% to AU$524 million, leading to its closure, News.com reported.
“The recent increase in competitive intensity in the Australian e-commerce sector has affected Catch’s financial performance and growth prospects,” Wesfarmers managing director Rob Scott said in a statement to the ASX.
Amazon set to dominate
Meanwhile, Amazon’s presence in Australia is expanding rapidly, with 1.1 million new users joining the platform in 2024. This growth is expected to continue, positioning Amazon as the leading online marketplace in 2025.
Australian shoppers are increasingly turning to Amazon for products in categories like books, electronics, and home goods.
However, Shein and Temu continue to dominate in the fashion space.
A major factor driving Amazon’s success is its fast delivery, reliable brands, and the introduction of its affordable “Haul” storefront. As a result, 63% of Australians plan to shop on Amazon in 2025.
