As a large number of American and European consumers are ready to hunt for extreme discounts over the Black Friday weekend, rapidly expanding speciality e-commerce sites like PDD’s Temu and its competitor Shein are expanding their toy lines.
TakeAway Points:
- 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.
- Amazon recently addressed lawmakers’ worries about its shopping deal with TikTok in a meeting with the House China committee.
- Through the agreement, users of the Chinese-owned social media platform TikTok may buy goods from Amazon without ever leaving the app.
- If TikTok does not sever its connection with its parent business, ByteDance, it could be banned in the United States in January.
Toy market expansion
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.
High demand for Toy
The recent surge in toy buying on Temu and Shein is getting the attention of U.S. companies like L.O.L Surprise! doll maker MGA Entertainment, which sells its stuffed animals and figurines to traditional retailers like Target and Macy’s. MGA CEO Isaac Larian said the company would consider selling on the e-commerce platforms to reach more shoppers.
“We want to reach (all levels) of consumers, not just the people with average incomes,” he said.
Shein and Temu increasingly appeal to shoppers earning less than $50,000 per year, who have been squeezed by a surge in consumer prices since 2021. More low-income shoppers are making purchases online to find bargains, according to Bank of America credit card data ahead of the holiday shopping season.
Amazon questioned by house China committee over partnership With TikTok
Representatives from Amazon spoke with the House China committee in recent months to address lawmakers’ worries about the company’s collaboration with TikTok.
Amazon representatives met with the House China committee in recent months to discuss lawmaker concerns over the company’s partnership with TikTok.
A spokesperson for the House Select Committee on the Chinese Communist Party confirmed the meeting, which centered on a shopping deal between Amazon and TikTok announced in August. The agreement allows users of TikTok, owned by China’s ByteDance, to link their account with Amazon and make purchases from the site without leaving TikTok.
“The Select Committee conveyed to Amazon that it is dangerous and unwise for Amazon to partner with TikTok given the grave national security threat the app poses,” the spokesperson said. The parties met in September, according to Bloomberg, which first reported the news.
TikTok’s future viability in the U.S. is uncertain. In April, President Joe Biden signed a law that requires ByteDance to sell TikTok by Jan. 19. If TikTok fails to cut ties with its parent company, app stores and internet hosting services would be prohibited from offering the app.
TikTok may be free from ban
President-elect Donald Trump could rescue TikTok from a potential U.S. ban. He promised on the campaign trail that he would “save” TikTok and said in a March interview with “Squawk Box” that “there’s a lot of good and there’s a lot of bad” with the app.
In his first administration, Trump had tried to implement a TikTok ban. He changed his stance around the time he met with billionaire Jeff Yass. The Republican megadonor’s trading firm, Susquehanna International Group, owns a 15% stake in ByteDance, while Yass has a 7% stake in the company, NBC and CNBC reported in March.
