By Jessica Yun
Ultra-cheap fast-fashion giants Shein and Temu are expected to capture a bigger chunk of Christmas spending this year as more Australians look to celebrate and decorate their homes on a budget.
While shoppers may not be looking to purchase Christmas gifts from the discount e-commerce juggernauts, Roy Morgan consumer trends expert Laura Demasi pointed out that Shein and Temu – estimated to drive a combined $2 billion in annual sales – have had a 30 per cent jump in monthly customers at a time when many retailers have been hit hard by reduced consumer spending.
Retail experts expect many Australians will go online to Shein and Temu rather than braving the shops.Credit: Dominic Lorrimer
“There’s all that other spending that happens over the period – buying clothes for yourself, household goods, decorations, all that stuff that we buy in excess over the peak season to support all the stuff we’re going to do over that six- to eight-week period,” Demasi said at an industry roundtable hosted by the Australian Retailers Association.
“I think a lot of that is going to be transacted through Shein and Temu.”
Australians will spend close to $70 billion in the six-week lead-up to Christmas – a 2.2 per cent increase on last year, Roy Morgan estimates. A record $6.7 billion is projected to be spent during the Black Friday and Cyber Monday sales alone – 5.5 per cent more than last year. The sales event has been building more momentum every year and has become bigger than the Boxing Day sales.
More than 3.8 million Australians shopped on Temu at least once in the past 12 months, according to Roy Morgan data. About 2 million Australians did the same on Shein. Most of these shoppers are repeat, high-frequency customers.
Temu offers a broad range of products, from household goods and power tools to novelty items, at very low prices, while Shein is predominantly a fast-fashion retailer that recently hit $1 billion in sales and tripled profits in Australia. Both have come under fire for poor labour conditions in factories and overproduction of poor-quality products.
Demasi said retailers had underestimated Shein and Temu’s impact on the local market and were in denial.
“The consensus was they’re going to take share away from Kmart and discount [stores]. That hasn’t happened,” she said. Kmart’s earnings soared 24.6 per cent to $958 million in the 2024 financial year, making it the stand-out performer for parent company Wesfarmers. “They’re taking share away from everybody else.”
Australian retailers are losing sales to Temu and Shein.Credit: Bloomberg
Craig Woolford, consumer and retail analyst at MST Marquee, agreed with Demasi’s predictions and said customers would be seeking value on items “ancillary to the festive season”.
“People buy their Christmas lights on eBay or Amazon, and now they can buy them on Temu,” Woolford said.
“Temu is disrupting because they’re going straight to factory, and so they’re cutting out some margin along the value chain. That’s where it’s becoming very cheap.”
Consumer advocate Choice recently tested 15 battery-powered products purchased from Temu such as games, light-up costumes and watches, and found they all failed at least one mandatory regulatory requirement.
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