Chinese retailers will scoop up the few remaining customers Amazon has left behind
Matthew Lynn City columnist
Anyone who uses the internet to shop – which, come to think of it, is just about all of us – will have noticed that there is suddenly a whole new range of choices. If you want fast fashion, Shein has become the place to look. Its reputation will be enhanced with an IPO in New York that may well see it valued at $90bn or more, taking it right into the big league of major internet companies.
Shein has faced a series of allegations over its supply chains and the meagre wages for its workers, but that hasn’t stopped teenagers in particular snapping up its stuff at bargain prices. It is already notching up $24bn in global sales, which are projected to hit $60bn by the middle of this decade.
It is not alone. Temu may only have started last year, but it has already clocked up 120 million customers around the world and is expected to hit $14bn in sales this year. It enables Chinese manufacturers to ship directly to consumers around the world instead of going through Western marketplaces such as Amazon or eBay. It is already one of the largest spenders on web advertising, paying out whatever it takes to build up a customer base.
Likewise, Miniso is building its presence in the UK as part of a global expansion, selling homewares that undercut almost everything on the market. One thing is clear: while Chinese manufacturers used to be happy to supply Western retailers, they are now increasingly cutting them out and selling directly through Chinese aggregators or through their own online retail sites.
That will deliver the final blow to the British high street. The old-style chains that used to dominate our town centres and shopping malls just about managed to weather the onslaught from Amazon and the other online giants. Those that survive at all have had to slim down and restructure. A few such as M&S have even managed to start expanding again.
But the new breed of Chinese online insurgents poses a very different kind of threat. They can often dramatically undercut the prices offered by the existing web giants, and they are far, far more competitive than retailers with lots of branches in regional British town centres. Indeed, Wall Street analysts already reckon they are a real threat to Amazon. If that is even only partially true, they will surely prove deadly
