According to new data from Forrester, the two rapidly growing e-commerce platforms, Shein and Temu, are expected to experience a significant slowdown in growth rates next year. Based on an analysis of retail trends for 2025, this prediction suggests that despite their intensive digital advertising campaigns and prominent marketing efforts, the fast-fashion giants may struggle to maintain their current growth momentum.
As reported by Retail Week, Forrester’s findings indicate that the predicted downturn is linked to various factors, ranging from concerns over product quality to mounting scrutiny regarding their environmental and ethical practices.
For Shein and Temu, rapid growth has been accompanied by increased complaints and criticisms. Consumer dissatisfaction with the quality of items has grown, and activists have repeatedly called attention to the companies’ alleged unethical production processes and perceived advantages in shipping that raise competition concerns.
Moreover, rising nationalist sentiments in some markets have led to more localised shopping choices, hindering the expansion of global fast-fashion brands. As environmental and ethical criticisms intensify, Shein and Temu face opposition from environmental advocacy groups and tighter regulatory oversight, which could impact their operational freedom and appeal in key markets.
Shein has faced significant financial and regulatory hurdles in its growth process. One challenge has been securing an initial public offering (IPO) in London, which has proven elusive amid increased scrutiny of its business model. Similarly, Temu, owned by the Chinese company PDD, is grappling with high customer acquisition costs, which could dampen its profitability and overall growth prospects.
Despite all challenges and issues, Shein has continued to gain ground in the UK market, where it recently surpassed Boohoo in sales, with a reported 40% increase in revenue and a substantial rise in profits. However, Temu’s trajectory has been less stable. The platform fell short of its sales targets, contributing to a decline in PDD’s market value, which dropped by over £41 billion in August.