Chinese online retailers Shein and Temu are turbocharging Australia Post’s deliveries at home

Chinese online fast-fashion sites Shein and Temu are among the fastest growing shippers of parcels to Australia and that is creating a challenge for Australia Post.

Australia Post is experiencing significant growth in the volume of packages shipped by Chinese online retailers. Picture: Andrew Henshaw

International cross-border online shopping is growing this year after a decline in 2023, thanks to two relatively new Chinese marketplaces.

Such is the huge volumes of products from fast-fashion retailer Shein and Temu, they now represent at least 10 per cent of online-originated packages, the boss of Australia Post’s lucrative parcels and e-commerce division, Gary Starr, says.

The Temu app is the third most downloaded free app on Apple’s Australian App Store, while Shein is ranked 17th.

Mr Starr said international conflicts in Ukraine and the Middle East were disrupting cross-border e-commerce and requiring players such as Australia Post and its StarTrack parcels carrier to work harder with international partners to find alternative supply routes.

These international conflicts, as well as a pullback in consumer spending coming out of the Covid-19 pandemic, resulted in Australia Post’s London-based e-commerce delivery arm recording a 17 per cent fall in the number of parcels last year.

According to accounts lodged with the British corporate regulator, Australia Post Global eCommerce Solutions UK (APG UK), which has a presence across Britain, Europe, the US and Asia, posted an 8.7 per cent decline in sales to £116.7m for the 2023 fiscal year, with its losses worsening by about 23 per cent to £5.3m. Although the UK arm is only a part of Australia Post’s global cross-border parcels business, which works with British retailers such as Asos and Boohoo.co to ship goods all over the world, it is reflective of the downturn in volumes last year.

“UK businesses are currently facing many uncertainties such as the consequences of Brexit, environmental sustainability and geopolitical events such as the on­going wars,” APG UK directors, which includes Mr Starr, said in the company’s latest financial statement.

“These uncertainties contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour short­ages, disrupted supply chains and new ways of working.”

That cross-border trade began to improve this financial year and APG UK returned to profitable growth, a spokeswoman for Australia Post said. For the first half of the financial year, Australia Post’s group parcels and services revenue of $3.86bn was up 1.3 per cent on the first half last year.

“There’s definitely been shoppers looking for value and they are absolutely spending online,” Mr Starr said.

“We are certainly still seeing growth in volume … and we’re seeing growth particularly out of China where cross-border (trade) into Australia and China to everywhere else in the world has really grown over the last couple of years. And players like Temu and Shein, Alibaba and of course Amazon are all growing sig­nificantly globally, not just in ­Australia.”

Temu and Shein, both relatively new companies to online shoppers, have had double-digit growth over the past few years. Analysts at Jarden estimate that Temu is engaging with Australian consumers more than 10 million times a month and is now a top 20 online shopping site after less than 12 months.

A Jarden report says launched in early 2023, Temu had by December secured an enormous 8 per cent of the marketplace visits. Picture: Mark Stewart

“Locally, Temu has grown exponentially since its launch in early 2023 and took an 8 per cent share of marketplace visits in ­December 2023,” a recent Jarden report said.

Mr Starr said: “We are observing the market in China and are seeing Temu grow.

“They use a big range of carriers so I don’t have visibility to the overall picture, but I certainly see in Australia domestically that Temu and Shein are both growing – and I’m pretty confident they would be growing similarly around the world.

“I do know it’s growing and growing rapidly. And Temu has already globally carved out around 10 per cent of the global cross-border market and Shein is a similar sort of percentage and they are definitely focused on growing their brand.”

Mr Starr said that, as consumers looked for value and to save money on their purchases, they were increasingly turning to marketplaces, such as Temu and Shein, with these online marketplaces the fastest-growing part of the market.