The Next Amazon Killer Is Really Just a Dollar Store Killer
China’s Temu is chipping away at the stranglehold that retailers such as Dollar General and Dollar Tree have over low-income and discount shoppers.
Is it a game or is it shopping?
Photographer: Stefani Reynolds/AFP via Getty Images
Retail industry watchers are saying that Amazon.com Inc. has met its match with the viral popularity of online shopping app Temu. Owned by China’s PDD Holdings Inc., Temu has been described as an “Amazon killer” and “the future of buying things” because you can get pretty much anything on the site for as little as 14 cents. But it’s not Amazon that should be worried about Temu — it’s dollar stores.
An analysis of credit card spending from consumer data analytics firm Earnest Analytics shows that Temu’s rise has had the most impact on Dollar General Corp. and Dollar Tree Inc. According to the firm’s analysis, which isolates spending by a brand’s existing customers across that brand’s competitors, Temu’s share of discount spending rose from 0% to 14% in the year ending in September. During that same period, Dollar General and Dollar Tree, which also owns Family Dollar, both lost a respective 8% and 4% in discount spending share. Discounter Five Below Inc. and Ollie’s Bargain Outlet Holdings Inc. each lost roughly 1% share during that time.