Black Friday saw a fierce competition between online retailers Temu and Shein, leading to a significant increase in the cost of online marketing. The “cost per click” for popular Google search keywords surged as both companies heavily invested in advertising to gain visibility on one of the biggest shopping days of the year. Temu and Shein have been particularly aggressive, even targeting their rivals’ keywords to capture consumer attention.
This has impacted the broader online retail sector, with other retailers feeling the pressure to increase their own marketing budgets to keep up. Helen Reid, a London-based reporter covering the European retail sector, notes that online marketing costs are now a critical factor in retail strategy. The competition is affecting not just fast fashion and online-exclusive brands but also more traditional retail companies with an online presence.
Shopping online can sometimes feel like playing an arcade game on sites like Temu and Shein. Visitors use their computer mouses or cellphone screens to browse through a plethora of colorful gadgets, accessories, and trinkets with prices that seem too good to refuse. Pop-up spinning wheels offer the chance to win coupons, and rotating captions warn that items are “Almost sold out” or selling fast.
These Chinese e-commerce platforms are thriving in this environment of impulse buying.
Cost spikes in online marketing
They use a business model supercharged with social media savvy and an extensive array of affordable goods, most shipped directly from merchants in China based on real-time demand.
Analysts with Salesforce forecast that Shein, Temu, TikTok Shop, and AliExpress will collectively pull in roughly $160 billion in global sales outside of China this holiday season, with most of the sales going to Temu and Shein. Consumers are drawn to the platforms for their affordable prices and wide selection. Lisa Xiaoli Neville, a nonprofit manager in Los Angeles, estimates she spends at least $75 a month on Shein products.
Ellen Flowers, a lifestyle blogger in Dallas, recently paired a $3,500 dining table with $25 dining chairs from Temu to save money. Black Friday online shopping this year set a new high, reaching $10.8 billion in sales, according to Adobe Analytics. This amount is more than double what consumers spent online in 2017.
Spending on toys was a major driver of online Black Friday sales, with toy sales up 622% compared to an average day earlier this fall. Other popular categories included jewelry, appliances, apparel, and electronics. More than half of all online sales on Black Friday were made on mobile devices.
MasterCard reported that online retail sales rose 14.6% compared to last year, while in-store sales only inched up 0.7%.
