Shein and Temu ship about 1 million packages per day to U.S. customers

According to recent news, before Christmas this year, the number of parcels shipped to American customers by fast fashion company Shein and Pinduoduo's cross-border e-commerce platform Temu has surged, almost on par with several well-known retailers in the United States. According to data from parcel transportation consulting firm ShipMatrix, these two fast-growing shopping platforms ship an average of about 1 million parcels per day in the United States. Although this number still accounts for a small proportion of the total number of parcels shipped in the United States every day, it is growing rapidly.

Temu and Shein already deliver more than twice as many packages to U.S. customers each day as TV shopping networks and online retailers QVC and HSN, which together deliver about 413,000 packages a day across the country. Amazon delivers more than 20 million packages a day in the U.S.

Satish Jindel, president of ShipMatrix, said both Temu and Shein were busier during the current peak shipping season, with ShipMatrix estimating that the average daily U.S. package deliveries this quarter is about 82 million.

Analysts say Shein and Temu have helped boost air cargo volumes at a time when the rest of the shipping industry is struggling with sluggish demand.

Shein was founded in China more than a decade ago and debuted in the U.S. in 2017. Currently headquartered in Singapore, Shein achieved revenue of $23 billion last year and filed for listing in the U.S. this year. Pinduoduo launched Temu in the U.S. last year and aired an ad during the NFL Super Bowl in February.

“The volume of business they have in the U.S. is staggering and growing very quickly,” said Sunandan Ray, chief executive of Unique Logistics International, a logistics and freight forwarding company.

There are signs that both companies are growing in popularity in the U.S. Temu’s website and app were ranked 10th in visits among retailers across multiple categories, second only to JCPenney on Black Friday, according to digital data and analytics firm SimilarWeb. Apple also said earlier this month that Temu was the most downloaded free app on iPhone in the U.S. in 2023.

Temu and Shein, both disruptors of U.S. retail, sell products such as $5 sweaters and wireless headphones, as well as more expensive items. The two retailers say they are able to offer consumers lower costs thanks to their advantages in logistics.

Individual packages destined for the same ZIP code or geographic region in the U.S. are first packed together on pallets in China, skipping the step and higher costs of sorting in the U.S. Typically, U.S. retailers store imported inventory in warehouses across the country before sorting and packing them for delivery to stores or individual customers.

Temu said most of its merchants are in China, and they send their products to Temu-owned warehouses for inspection, packaging and shipping. "By inspecting and packaging products at the source, we eliminate many traditional logistics steps," a Temu spokesman said, adding that handling a large number of orders also helps reduce shipping costs.

Shein said its on-demand business model matches the supply of goods with market demand, and close cooperation with manufacturers also avoids the problem of overproduction while reducing storage costs. According to logistics consulting firms, while Shein has logistics facilities in Indiana and California to handle its most popular goods, most packages are still packaged in China. A Shein spokesperson said the company has also established connections with warehouse operators in the United States to support its express delivery business.

After recent attacks on ships in the Red Sea, logistics analysts are closely monitoring the security situation to determine whether shippers need to move ocean freight from the region to aircraft. However, the situation is unlikely to affect U.S. consumers shopping on Shein and Temu, as the two companies typically rely on aircraft to transport goods across the Pacific.

Representatives of the logistics companies said Temu and Shein were minimizing package size and betting that customers would accept longer delivery times in exchange for other compensation.

According to Shein's website, 76% of orders are delivered to U.S. customers within 10 days using standard delivery. Temu's website says its packages typically arrive within five to eight business days of U.S. orders.

After being flown to the U.S., pallets of Temu and Shein are trucked to parcel carriers’ facilities. The couriers say they have more time to get packages to end customers, which means they can save on expensive long-distance trucking to meet tight deadlines.

“We benefit from processes like pre-sorting in the supply chain,” said Andy Whiting, founder and CEO of last-mile delivery company Better Trucks. “We can offer them lower delivery costs because they’re doing less work for us.”

ShipMatrix estimates that the average order value of QVC's packages is $46, while Temu's average order value is $29 and Shein's is $39.

“I feel like I can save so much and I can afford it,” said Felicia Johnson, a 27-year-old kindergarten teacher in New York who frequently shops on Shein. “That’s why I continue to shop on the platform.”

Shein and Temu also benefit from the so-called de minimis rule, which exempts customers who buy imported goods from abroad from duties and other taxes on goods valued at $800 or less. The rule is designed to reduce complications for low-value, high-frequency shipments between foreign sellers and U.S. customers.

But many U.S. lawmakers and businesses say the exemption is a loophole that allows companies like Shein and Temu to face little scrutiny from customs, and they have called for greater scrutiny of the companies.

Shein and Temu said their growth was not dependent on minimum rules and the US allegations were "completely without basis".