Shein, Temu branch further into toy market

Fast-growing specialty e-commerce sites such as PDD’s Temu and its rival Shein are branching deeper into the business of selling toys as many American and European shoppers prepare to seek out steep bargains during the Black Friday weekend.

In previous years, Temu and Shein – which sell primarily from mobile phone-based apps – would not have been the usual places for shoppers to buy toys and other holiday gifts. The sites face concerns from regulators and U.S.-based consumer product makers about fakes and counterfeits.

The competing platforms serve as America’s digital “dollar stores,” offering mostly unbranded items, from bath towels and clothes to home appliances, at low prices.

Now both Temu and Shein are looking to win a bigger slice of the global market for toys, which fuel sales for retailers during the holiday season. Toys drove $108.7 billion in sales globally in 2023, according to market research firm Circana.

At Shein, which became popular selling $5 t-shirts and $10 sweaters, toys are one of the fastest-growing categories, a spokesperson for the site said. Toys have seen double-digit percentage growth in sales volume on Shein’s platforms year-over-year, the spokesperson said.

Temu said it is seeing an increase in searches for toys by prospective shoppers.
To be sure, major mass-merchandise retailers Amazon, Walmart and Target remain the mainstay for toy shoppers – together representing nearly 70% of U.S. toy sales, said Linda Bolton Weiser, a research analyst at D.A. Davidson.

Still, the share of U.S. holiday shoppers planning to buy gifts on Temu this year stands at 13%, up from 9% last year, according to market research firm Kantar. Additionally, U.S. credit card spending on both sites this month is up compared to 2023, according to data firm Facteus.