Unable to beat Temu, the "king of volume"! Another US retailer collapses

In modern society, people's consumption has generally downgraded, and many retailers in the United States have fallen into difficulties and are on the decline.

On the 4th of this month , the American retail giant "99 Cent Store" announced that it would close all of its chain stores, a total of 371 stores, and officially filed for bankruptcy on the 8th.

It is understood that the 99 Cent Store is the American version of the Dollar Store, which was established in 1982. Most of the goods used to be sold at 99 cents or even lower prices, and with a wide variety of goods, it is widely welcomed by consumers, especially those with low and middle incomes, and has a place among the chain brands of the discount retail industry in the United States.

However, the once star company with hundreds of branches has now gone bankrupt and become a passer-by of the times. A deeper investigation revealed that this is inseparable from the rising cost of goods and the rise of low-cost e-commerce platforms.

In the past few years, consumers' shopping habits have been constantly changing. Coupled with factors such as rising prices and inflation, the 99 Cent Store changed its previous "99 cents everything" model and adjusted the prices of most items to far more than $1, causing dissatisfaction among many consumers.

In addition, affected by the epidemic in previous years, American e-commerce platforms have rapidly penetrated the market, especially Temu, which is known for its "low prices", which has had a significant impact on many offline discount retail stores.

Since its launch in the United States in September last year, Temu has successfully opened up the overseas market by using various low-price marketing strategies such as "UP TO 90% OFF", free shipping for the first order of 0.99, and free shipping. It has also quickly gained more than 120 million active users by inviting new users to get preferential discounts.

In addition, the $10 clothes, $4 household items, and decorations, storage containers and toys similar to those in the $1 dollar store on the Temu platform all attract a large number of users.

With the invasion of Temu's low-price strategy, a large number of offline retailers in the United States that are famous for their low prices, including the 9 Cent Store, Bed Bath & Beyond, Family Dollar, Joann, Tuesday Morning and many other old chain stores, have been under increasing pressure and have been forced to close down. In addition, many discount stores have also announced plans to close stores.

In addition to being popular in the US market, Temu's performance in Japan, South Korea, Australia, the United Kingdom and other countries cannot be underestimated. Data shows that Temu's total revenue reached 27 billion pounds in 2023, an increase of 93% compared to 2022, and the achievements are particularly impressive.

In the current unstable economic environment, more and more people are willing to pay for low-priced goods. Temu has also been thriving in the overseas market by relying on this killer feature.

But it is worth mentioning that along with the low-price strategy, problems such as "low threshold and poor product quality" may emerge one after another. From the perspective of long-term development, Temu needs to continuously strengthen platform management and optimize products, and sellers should also think carefully when choosing a platform to operate.

Temu

Low price