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According to Reuters, two rapidly growing e-commerce websites, Temu and its rival Shein, are setting their sights on the toy business as shoppers in the US and Europe gear up for Black Friday deals.
In previous years, Temu and Shein – predominantly mobile app-based retailers – were not go-to platforms for toy and gift purchases during the holiday season. These websites have also faced concerns from US-based consumer goods regulators and manufacturers about counterfeit goods. The platforms have offered mostly unbranded items, from towels and clothing to household goods, at low prices.
Now, both Temu and Shein are aiming to capture a larger share of the global toy market, boosting holiday sales for retailers. According to market research firm Circana, toys generated $108.7 billion in revenue worldwide in 2023.
A spokesperson for Shein, known for its $5 t-shirts and $10 sweaters, revealed that toys are among their fastest-growing categories. The spokesperson stated that toys have witnessed double-digit growth in sales on Shein’s platform compared to the same period last year.
Temu has also noticed a growing trend of toy searches among potential shoppers.
While mass merchandise giants Amazon, Walmart, and Target remain the “big three” with nearly 70% of US toy sales, Temu is making inroads. According to market research firm Kantar, 13% of US holiday shoppers plan to purchase gifts on Temu this year, up from 9% last year. Additionally, according to data from Facteus, US credit card spending on both websites has increased this month compared to 2023.
The recent surge in toy purchases on Temu and Shein is catching the attention of US companies like L.O.L. Surprise! doll maker MGA Entertainment, which specializes in plush toys and figurines for traditional retailers. MGA’s CEO, Isaac Larian, stated that the company would consider selling on e-commerce platforms to reach a broader range of shoppers.
Shein and Temu are increasingly attracting shoppers with incomes below $50,000 per year, who have been impacted by rising consumer prices since 2021. Lower-income shoppers are increasingly turning to online shopping for bargains, according to Bank of America credit card data pre-2021.
In Europe, young shoppers aged 18 to 34, in particular, are buying toys on Temu, Shein, and the AliExpress platform, according to a September Circana study across France, Germany, Italy, Spain, and the UK. AliExpress also offers cheap China-made goods, such as toy guns for under $1.
The study revealed that 39% of European consumers had purchased toys or games on one of these websites since the beginning of the year, with this figure rising to 60% for younger consumers.
Attracted by lower platform selling fees, toy distributors like Popmarket are increasingly joining the online marketplaces of Shein and Temu.
Tim Hinsley, CEO of Alliance Entertainment’s retail division, added that compared to toy buyers on Amazon, Walmart, and the eBay online marketplace, Shein shoppers tend to opt for lower-priced Popmarket toys.
Shein is offering a free three-month period for new sellers, after which they will charge a 10% fee. This month, Temu opened its app to all US-based sellers, having previously only allowed invited sellers to join. Hinsley shared that Popmarket plans to start selling its toys on Temu after the holidays, adding that the distributor is working with toy manufacturers to bring more of their products to the two platforms and ByteDance’s TikTok Shop.
According to Reuters
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