Replay of "Black Friday": Temu still need to pay a huge tuition

As the predecessor of Double Eleven in the European and American markets, Black Friday has always been the golden time for consumption. All merchants are gearing up to make a big splash at this time. This year's Black Friday is coming to an end, so let's review and summarize it together!

"Black Friday", the predecessor of "Double Eleven", has always been the most important consumption period of the year in the European and American markets. After the rise of the Internet, American entrepreneurs invented "Cyber ​​Monday" in 2005, which followed "Black Friday". This time point can almost be said to have kicked off the entire Christmas shopping spree.

In the past, these festivals rarely involved much participation for either Chinese consumers or platforms. However, as some Chinese companies going overseas began to extend their e-commerce tentacles into the European and American markets, Black Friday, Cyber ​​Monday and all the way to Christmas have become important sales nodes that cannot be avoided.

For example, TikTok Shop, which recently entered the US market with great fanfare, participated in this year's "Black Friday" for the first time. Shein and Temu, which have been conquering North America for a long time , regard this year's "Black Friday" as an important moment to hit their annual GMV targets , trying to grab more market share from Amazon and Walmart.

Today's "Black Friday" is just like Double Eleven, with the battle line getting longer and longer . For example, Temu and Shein both launched "Black Friday" related promotional activities in late October and early November, extending the original one-day crazy shopping day to a "Black Friday" shopping season of more than a month, and it is almost certain that it will continue to extend into the Christmas season.

Chinese e-commerce companies going overseas have high hopes for this Black Friday. From the scene, it seems that these latecomers have indeed gained the upper hand. But is this really the case? Has the giant Amazon been beaten to a pulp? The answer may not be that simple. After all, when separated by oceans, it is often an unspoken tacit understanding to report good news but not bad news.

1. Breakthrough growth of Chinese overseas e-commerce companies

There is certainly a reason why overseas e-commerce platforms are working so hard. Facts have proved that even though the US economy has not yet fully recovered from the post-inflation era, the purchasing power of American consumers is still very impressive.

According to real-time data from Adobe Analytics, on November 24, Black Friday, online sales in the United States alone reached a record high of $9.8 billion (about RMB 70 billion), a year-on-year increase of 7.5%. At the same time, on November 27, the day after Black Friday, Cyber ​​Monday, online sales in the United States exceeded $12.4 billion (about RMB 1.55 trillion to 1.6 trillion), a year-on-year increase of 9.6%. The entire shopping week from Black Friday to Cyber ​​Monday saw overall sales reach a staggering $38 billion, a year-on-year increase of 7.8%.

Judging from the relevant data provided by various platforms, this "Black Friday" shopping spree seems to have also brought great benefits to Chinese e-commerce companies going overseas. According to official data from TikTok Shop, TikTok Shop achieved breakthrough growth in the US market through "Black Friday", with GMV reaching US$61.2 million, a month-on-month increase of 131%. Among them, orders in the US market (November 14th to November 20th) on "Black Friday" increased by 205%, and the UK market (November 13th to November 19th) increased by 142%.

Screenshots posted by many Temu sellers on social media show that quite a few of them saw a surge in orders during Black Friday.

Of course, Temu’s “Black Friday” promotion of “US$200 coupons per person and three free products of your choice” has instead brought more guides on Xiaohongshu from overseas people who are crazy about getting the best deals, which has made domestic users of Pinduoduo envious.

2. Understand Temu, TikTok Shop's low prices

TikTok Shop announced this year's "Black Friday" investment rules in the United States in September, showing that it will provide merchants with a 50% subsidy discount on "Black Friday" to attract merchants to participate in the promotion. Related activities will start on October 27 and will last until November 30.

In addition, TikTok has also launched a live broadcast plan to encourage merchants to conduct online live broadcasts of more than 1.5 hours during Black Friday, and offer more discounts based on the GMV of the merchants.

TikTok Shop "Black Friday" promotion results

For the consumer side, TikTok, which participated in "Black Friday" for the first time, probably learned the three low-price tricks from Temu : in addition to a $20 discount for new users' orders, each category also has a discount of 20% to 30%. At the same time, it also provides shipping subsidies for each order and supports 90 days of no-reason returns and exchanges. In order to attract new users to place orders, it can be said that the amount of money spent is not small.

According to Baijing Chuhai, TikTok Shop directly compared prices with Temu during the "Black Friday" period, and followed up immediately once it found any price discounts from Temu.

From this perspective, relying on TikTok's own size advantage and low price, TikTok obviously hopes to replicate the rapid user accumulation that Temu achieved during last year's Super Bowl through "Black Friday".

3. Low-key Amazon is still the ultimate boss

Amid such excitement, China's overseas e-commerce companies seem to have surpassed Amazon in terms of voice and traffic, especially Temu, which has recently revealed that it will appear on the "American Spring Festival Gala" Super Bowl next year.

But a key issue is that under such circumstances, Amazon is almost hiding behind this excitement in a form of making a fortune in silence.

After all, the cheapest products, acceptable quality and excellent service are almost an impossible triangle.

Shein, Temu or TikTok Shop, in fact, so far, they are still extremely squeezing domestic suppliers and burning money on platform subsidies in exchange for a part of the market share of mid- and low-end products.

The hot-selling categories officially announced by TikTok Shop are still mainly home furnishings, fast-moving consumer goods, and women's clothing, with a high degree of overlap with Temu and Shein. This is because the suppliers behind these categories are either produced in Yiwu or made in Panyu. The only difference between them is who can get the supplier to offer a lower price.

In the heated discussions and comparisons in the media, it seems that Amazon has long been on the decline and is completely gone, but the actual performance is a different picture.

According to Similarweb data, Shein's US website traffic in October was 28.6 million, a year-on-year increase of 7.25%, but the conversion rate dropped from 4.6% in the same period last year to 4.1%. Temu's US conversion rate in October was 4.5%, while Amazon, the largest e-commerce platform in North America, which is always losing traffic to newcomers, had a conversion rate of 56%.

At the same time, research data provided by SensorTower shows that compared with a year ago, Amazon actually cut its holiday advertising spending in early November, but user engagement on the platform was still higher than in 2022.

Therefore, during this year's "Black Friday", Amazon's sales also set a record high in its 29-year history. During the 11-day event, a total of 1 billion items were sold, and Prime members added millions of new users.

Screenshot of Amazon's official website

Today, Amazon is not just the largest e-commerce giant in North America.

Before Thanksgiving this year, the number of packages delivered by Amazon in the United States has surpassed UPS and FedEx, and Amazon Prime has become the largest express delivery brand in the United States.

Amazon Prime can be said to be the core moat of Amazon's e-commerce services, and product quality, delivery speed and relative prices can be guaranteed.

It is not difficult to find complaints from North American users about Temu and TikTok Shop shopping products on X. Poor quality and slow delivery can be said to be common problems. The only good thing is probably that refunds are allowed without returning the goods.

The question is, is this policy really possible to continue in the long run? Especially now that the low-end e-commerce track in North America is so crowded, looking at the crazy competition among Temu, Shein and TikTok Shop, Amazon will probably be able to sit on the Diaoyutai for a long time.

Author: Zheng Yijiu

WeChat public account: YIFAN (ID: finance_yifan)