Hello!

Ahmed and Peter here for more Sunday bites.

We saw the new iPhone 15 launch and like previous models, our batteries are absolutely drained this week writing some down-the-line issues for you lovely people.

We’re covering Chinese companies’ enriching market share into the US Retail market. Wow that sounded too official.

Let’s talk Shein and Temu (young moms rejoice).

Shein and Temu: Amazon Killers

1. Over the last couple of years, 2 powerhouses have emerged to combat Big Retail in the US by outperforming over one thing: Price.
   

2. Companies like Shein and Temu are outcompeting Amazon on price, but without any of the convenience of 24/48 hour delivery.
   

3. Turns out Americans don’t mind some items taking 4+ days to arrive at their door steps when they’re paying 40-60% less.
   

4. Which leads to another advantage: dynamic distribution. For instance, instead of having a bunch of full warehouses around the country, Temu ships directly from China, which allows them to gauge demand for certain items without having to worry about all the proprietary retail planning.
   

How’s it going? Well…amazing.

• Shein just became America’s largest fast-fashion seller in America.
  

• Both Shein and Temu have GROWN their customer base while Amazon, Target, Wayfair have stagnated in market share.

Stop leading me on. What can I tell my boss to sound smart? Here are 4 things

In conventional retail, it never used to matter where your shit came from. ‘Made in China’ is practically burned into our minds.

• But now customers know that everyone uses similar suppliers, so for bottom-dollar items, branding/curation/marketing doesn’t really matter in the case of Temu + Shein.
  

• There was a huge story a few years ago about Amazon bringing the ‘Post-Brand’ era into reality. It was caused with the rise of Alexa, where everyone thought they were going to start ordering things by uttering ‘Hey Alexa', and let Amazon take care of the curation for us.
  

• That never happened, companies like Shein + Temu might be the beginning iteration of that actually happening. Do you really care about where you got the lamp if you find the exact same thing on Temu? Debatable. But you might do that for other things.
  

• Shein + Temu are some of the first Chinese companies to make a dent in a major US industry. For years, we talked about the rise of China, but how they consistently failed to penetrate the US market.

  • Now we’re witnessing a key shifting point. It’s happening in retail, but that’s always been China’s core competency. It’ll be interesting to see if Chinese companies can replicate this success in other industries.

Again, none of this is investment advice.

What AI made this week

Wow even AI thinks we ran out of ideas

Have a great week!

Ahmed and Peter