From 2018 to 2023, the US third-party marketplace outpaced overall e-commerce growth, driven by changing consumer behaviour, rising living costs and the rise of emerging players such as Shein, Temu and TikTok Shop. Each platform leads in distinct categories - Temu in electronics, Shein in apparel and TikTok Shop in beauty. This report explores their internal competition, competitive pricing and the opportunities and threats they present to industry competitors.
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From 2018 to 2023, 3P marketplaces’ share of total US e-commerce sales rose from 22% to 27%. This growth is driven by shifting consumer behaviour, influenced by rising living costs and the entry of emerging players such as Shein, Temu and TikTok Shop offering affordable products in recent years.
Amazon dominates the US 3P marketplace, but there remains a gap for budget-conscious consumers. Emerging players, backed by success in China, are entering the US to fill this void. In 2023, Douyin and Pinduoduo held 20% and 18%, respectively, of China’s 3P marketplace, while their counterparts, TikTok Shop and Temu, captured 0.3% and 2.6%, respectively, of the US market.
Despite significant overlap in their product offerings, Temu, Shein and TikTok Shop each leads in distinct categories: Temu excels in small consumer electronics, appliances and automotive; Shein dominates apparel and footwear; and TikTok Shop’s leading category is beauty and personal care.
The fast expansion of Temu, Shein and TikTok Shop is fuelled by their competitive pricing, driven in part by lower commission fees. Additionally, they utilise fully managed and semi-managed 3P seller models with a price evaluation system to maintain lower prices and strengthen their competitive edge.
The rapid growth of China-affiliated platforms in the US challenges e-commerce giants and impacts mid-priced brands in industries such as fashion and small appliances. To remain competitive, mid-priced players must emphasise their unique value propositions and strengthen loyalty programmes to retain customers and counter growing competition.
This is the aggregation of baby and child-specific products, bath & shower, colour cosmetics, deodorants, depilatories, fragrances, hair care, men's grooming, oral care, skin care and sun care. Black market sales and travel retail are excluded.
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