You can’t engage in a conversation about the retailing business these days without the names Shein and Temu coming up. The e-commerce companies are mass-market machines and have become the new darlings—or devils, depending on who’s talking—of retail.
With incredibly (often ridiculously) low prices, fast service (especially considering the goods are coming from 8,000 miles away), and assortments that range from gifts and apparel to home furnishings, each of these two brands is doing billions of dollars’ worth of business in the United States alone. Founded in 2012 by Chinese billionaire Chris Xu and headquartered in Singapore, Shein—which primarily focuses on fashion—reportedly made $2 billion in profits in 2023. Temu—which offers a wider range of goods—was founded a decade later by another Chinese billionaire, Colin Huang, owner of the platform’s now-Dublin-based parent company, PDD Holdings, which made a whopping $8.3 billion in profits last year.
In the process of capturing huge swaths of consumer dollars, the brands are attracting as much attention (and controversy) for their business practices, possible political affiliations and potentially predatory pricing as they are for their merchandise selections. They also represent the latest in a long, long line of disrupters seeking to turn the business of home retail upside down. From big-box chains to Amazon to direct-to-consumer brands, traditional home product retailers have always had a new foe to face. But in a favorable twist of fate, furniture sellers are in a good position to successfully compete with these latest challengers.
The shopping platforms, while different in some aspects, have several factors in common. Each works directly with factories in Asia—predominately China—to produce the goods they sell. Often, these reflect whatever is the style du jour, driven by a new movie, a hot color or the latest microtrend. Furniture can be stylish, but faddish? Not so much. People buying furniture usually are in it for the long run and aren’t going to go full-tilt Barbie in their living rooms, knowing it will probably look pretty foolish a year from now (if it doesn’t already). For once, the slow-moving dynamics of this business are a plus.
But there’s a more important reason furniture will be mostly immune from these online marketplaces: Size matters. One of the most basic elements of both brands’ business strategies is the ability to round up thousands—sometimes tens of thousands—of pieces of merchandise in one container or cargo plane to take them across the Pacific.
That’s not the way the furniture business works. A container might hold only 60 or 70 sofas or dressers, and not much is getting shipped by air due to cost and size. That conflicts with the volume-driven approach of these platforms—the numbers just don’t add up. So, they—not to mention the sellers who rely on TikTok or Instagram—are likely to stay away from big products like furniture. And therein lies the traditional sellers’ competitive advantage.
It’s why retailers that focus on furniture need to rethink their merchandise mixes when it comes to small, inexpensive and soft products. Items like decorative cushion covers, throws, soft wall hangings, small candles, and anything else that’s inexpensive and lightweight are just not going to be competitive with Shein and Temu. Worse, customers are going to compare prices on these products and wonder why they are so far apart. Will they also question the rest of the prices in the store? Maybe.
Shein and Temu are not passing fads. American consumers will always be attracted to low prices, the latest trend and the ease of shopping offered by these e-commerce giants. But retailers in the furniture sector are getting a pass and will not—at least for now—be feeling the brunt of all of this. Many are probably saying, “It’s about time.”
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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.
