Amazon & eBay Lose Daily App Users
With significant growth through low cost goods platforms such as Temu, are Amazon losing out?
Channel X recently reported that Amazon was losing 1M daily app users and eBay was losing 2M to new low cost item marketplaces such as Shein and Temu stepping up their game, this insight made us curious and keen to do our own research.
We recognise that Temu and Shein are brands that are selling extremely low cost goods, free delivery and massive incentives to their consumers through huge discounts that give the impression of great value to the end consumer. Since April, Temu in particular have been running intense levels of advertising whether that’s through Google Ads or even being very active with various deals through their social channels. This strategy has clearly paid off from not having a viable app in the UK prior to April this year to now having over 500k daily active users which is substantial growth already competing and marginally exceeding Shein.
Source: Similarweb - App Daily users on Android Smartphones
As per Channel X’s article, Amazon and eBay have seen some drops in daily active users. Despite relatively significant drops, it feels like there may have been a general change in consumer habits. If we compare July 2021 to now, the pandemic was still a constant fear for many consumers so online shopping was the preferred method. There was also on and off lock downs through the year which disrupted consumers freedom of venturing out the house, we have since seen consumers feel comfortable to go back to stores with less covid related news and no further lock downs.
The dramatic growth of Temu and marginal growth of Shein over the past few months seems to have made little difference to Amazon with daily user figures remaining the same whilst eBay has seen a slight drop. This small drop may have been a movement of users from eBay to Temu and Shein, which could be considered based on the types of products that are sold and that Temu could offer an equivalent to eBay at a much lower price. On the other hand, Amazon still remains a trusted, convenience orientated marketplace that gleams quality vs Temu that houses lesser known brands at questionably low prices.
For now, we don’t feel that Temu or Shein will be able to take much share from the likes of Amazon or eBay for that matter, at least short term. Whilst we are living in a cost of living crisis consumers may sacrifice quality for price by choosing Temu or Shein over others but the longevity and sustainability of such marketplaces is unknown. It’s an interesting space to watch and see how these brands develop their proposition further over time.
