Week #30: TEMU's U.S. Sales Growth Slows to 37% in August 2024 | Biden Targets SHEIN, TEMU with New Rules at De Minimis Exemption
Latest news and analysis on China’s global e-sellers
Here’s our pick for last week’s news:
Biden Targets SHEIN, TEMU with New Rules at De Minimis Exemption
S.F. Holding Posts $4.40 Billion in H1 2024 International Revenue
Kwai Q2 2024 Overseas Revenue Surges 141.4% to $155.07 Million
TEMU's U.S. Sales Growth Slows to 37% in August 2024
J&T Express Secures $1.25B Financing Deal with 20 Global Banks
TEMU Beta Tests Poland Site that Supports Shipping to France, Germany, Italy, and Spain
Alibaba's Trendyol Aims to Expand into Eastern Europe
TikTok Shop Plans to Enter Spain
Cre8 Direct Reports 25.81% Revenue Growth in H1 2024
Biden Targets SHEIN, TEMU with New Rules at De Minimis Exemption
The Biden administration announced on Friday, September 13, its intention to restrict low-value shipments entering the U.S. duty-free under the $800 de minimis threshold, a loophole frequently utilized by Chinese e-commerce companies like SHEIN and PDD Holdings' TEMU.
White House officials indicated plans to introduce a new rule that would exclude packages containing goods subject to Section 301 tariffs on Chinese goods, Section 232 tariffs on steel and aluminum, and Section 201 "safeguard" tariffs, which apply to items such as solar panels and washing machines, from the de minimis exemption.
"Given that approximately 70% of Chinese textile and apparel imports are impacted by Section 301 tariffs, this measure will significantly reduce the volume of shipments benefiting from the de minimis exemption," stated Daleep Singh, deputy national security advisor for international economics.
S.F. Holding Posts $4.40 Billion in H1 2024 International Revenue
S.F. Holding has announced its financial performance for the first half of 2024, with revenue reaching $18.95 billion, an 8.08% increase from last year, and a net profit of $677.67 million, up 15.10%.
The company saw a big boost in its international business thanks to recovering demand for shipping and new opportunities for Chinese companies looking to expand overseas. Its supply chain and international divisions brought in $4.40 billion, up 8.1% year-on-year.
As China's top cargo airline, S.F. handled over 1.14 million tons of goods worldwide, with domestic shipments accounting for 32% of the country's air freight. Globally, it runs more than 5,100 flights daily.
This year, the company focused on growing its network in Southeast Asia, Japan, and South Korea, leveraging Kerry Logistics' strengths in the region. S.F. secured over 40 new cross-border supply chain projects in various industries, from e-commerce and manufacturing to high-tech, fashion, home goods, and coffee chains.
Kwai Q2 2024 Overseas Revenue Surges 141.4% to $155.07 Million
Kwai has announced its unaudited results for the second quarter and first half of 2024, ending June 30. The company saw its overseas revenue hit $155.07 million in Q2, up 141.4% from last year. Online marketing revenue from international markets skyrocketed over 200% compared to the previous year and continued to rise each quarter. Meanwhile, Kwai's operating loss in overseas markets dropped by 64.5% to $39.05 million.
Kwai's ROI-focused growth strategy led to refined traditional marketing efforts and exploration of new growth areas. This approach helped boost its daily active users in core overseas markets like Brazil and Indonesia, with Brazil seeing a 15.4% rise in daily active users year-on-year. The company also improved content creation and monetization through better algorithms and traffic mechanisms. In Q2 2024, users in Kwai's main overseas markets spent nearly 80 minutes per day on the app, a 5% increase compared to the previous year.
TEMU's U.S. Sales Growth Slows to 37% in August 2024
A report from Bloomberg Second Measure (BSM) highlights a slowdown in TEMU's growth in the U.S. market. BSM data shows that TEMU’s sales growth rate dropped to 37% in August 2024, down from 45% in July and way lower than the 99% spike in Q2 2023. Bank of America analysts attribute this slowdown to the surge effect from last year and the stabilization of current sales.
In 2023, TEMU expanded rapidly and captured a notable portion of the market. By the first seven months of 2024, TEMU's U.S. market share had stabilized at around 3%, with a slight rise to 3.4% in August. TEMU’s sales in August grew by 3.5% from the previous month, while Amazon saw a dip after its Prime Day.
J&T Express Secures $1.25B Financing Deal with 20 Global Banks
J&T Express has announced a $1.25 billion financing deal for a three-year period, involving 20 banks from places like mainland China, Hong Kong, the U.S., Europe, and Southeast Asia. This follows an earlier round of funding in May where a Middle Eastern group invested tens of millions of dollars to boost J&T's expansion in the MENA region, particularly in the UAE and Saudi Arabia.
In early August, J&T released its first-half 2024 financial results, reporting $4.861 billion in revenue, a 20.6% increase from last year. The company also turned a profit compared to the previous year. J&T's Southeast Asia and China markets remain profitable, while new markets like Saudi Arabia, the UAE, Mexico, Brazil, and Egypt are still in the red, though losses have significantly narrowed year-on-year.
TEMU Beta Tests Poland Site that Supports Shipping to France, Germany, Italy, and Spain
TEMU's Poland site is in beta testing, and once officially launched, it will be ready to ship products to France, Germany, Italy, and Spain. Earlier, TEMU rolled out new benefits for European sellers, following a similar setup for U.S. merchants. Now merchants with European businesses are allowed to register, with the platforms in Germany, Italy, France, and Spain going live on July 17, and the U.K. on July 26.
To get more sellers on board, TEMU is waiving all fees and commissions for now. Sellers also benefit from a full suite of support services, including advertising, promotions, multilingual customer service, and free marketing across all channels. TEMU even offers business setup and training assistance for those who need it.
Alibaba's Trendyol Aims to Expand into Eastern Europe
Trendyol, Alibaba's Turkish e-commerce platform, has announced plans to expand into Europe, with a focus on Eastern European countries, due to the growing demand for Turkish goods in this region. The expansion will prioritize countries with similar logistics and cultural ties to ensure a seamless entry.
Trendyol CEO Erdem İnan mentioned that their international growth performed beyond expectations in the latter half of last year, becoming the most downloaded app in Azerbaijan within six months. Trendyol's strength lies in categories like textiles and home products, which have been well received in markets like Azerbaijan. Turkish e-commerce is still growing, and exports from the platform are projected to make up 3% of the total by year-end.
TikTok Shop Plans to Enter Spain
TikTok Shop has officially announced its entry into the Spanish market and will start selling in December. The platform has clear requirements for joining. Individual sellers need to provide proof of address and identification documents such as DNI, passport, or driver's license. Local companies must have a local warehouse, DNI or passport, financial statements, and also provide company registration documents and VAT number.
These differentiated entry requirements reflect TikTok Shop's precise targeting of different types of sellers. For individuals, the focus is on verifying identity and residence to ensure basic credibility and traceability. For local companies, there are more comprehensive commercial qualification requirements, such as a local warehouse for inventory and fast delivery, financial statements showing the company’s operational strength, and company registration and VAT documents to ensure legal and compliant operations.
The Spanish e-commerce market has great growth potential, with the market size expected to rise to $35.5 billion by 2024 and continue expanding at a compound annual growth rate of 9.72% over the next five years, potentially exceeding $56.4 billion by 2029. However, the number of e-commerce merchants in Spain is limited, mainly dominated by Amazon sellers, with most others still observing.
Cre8 Direct Reports 25.81% Revenue Growth in H1 2024
Cre8 Direct has released its 2024 mid-year financial report, revealing a revenue of $117.29 million for the first half of the year, up 25.81% compared to last year. From 2021 to 2023, the company's revenue stayed above $183.27 million. The majority of sales are in the American and European markets, with a strong focus on North America, making up over 85% of sales for years.
The company's growth mainly comes from its cross-border e-commerce business, which is split into two main areas: fitness products (under brands like RitFit and Kangaroo Hoppers) and home and stationery products (under brands like PAPERAGE, Elyn, and Heypop). Each of these is managed by separate subsidiaries in the U.S. RitFit, in particular, stood out in the first half of 2024, processing 141,500 orders. Its Amazon sales were $18.59 million, a 147.26% increase, while sales via DTC website grew by 138.88%, totaling $7.70 million.