Temu Hits 71% Market Share – Should You Worry? Plus: Google's Coming for Your Landing Pages

Episode Transcript

Chris (00:00:00): Welcome to another episode of Growing Ecommerce. I’m one of your hosts, Chris, and we have Mike Ryan, our other host. Today we’ve got some exciting topics lined up: we’re going to focus on Chinese e-commerce efforts abroad, something we haven’t talked about in a while. What’s up with JD, Shein, and Temu?

Mike (00:00:21): Yeah, podcast favorites! Now you have to stay on the podcast. There is no better topic—well, there’s one better topic, and we’re going to end with a pretty juicy Google patent. This is one of the craziest things I’ve heard in a long time. I agree with you.

Chris (00:00:42): It’s a Google patent. God bless the Google patent watchers; I’m not one of them, but someone shared this online and I really appreciate it because it’s quite juicy. No clickbait; this is really crazy. Let’s get into a great episode.

Mike (00:01:04): I’m excited, Chris. Let’s start with some news. I’ll kick us off with Chinese commerce, my favorite/least favorite topic. What’s going on with our friends from the East? They continue to view Europe, the US, and other international markets as growth potential—or as I called it last night, dinner.

Chris (00:01:35): Yes, the situation has become a bit more challenging in the US due to tariffs, so Europe is quite relevant for them. Shein and Temu are working hard to expand their local fulfillment and inventory, getting European brands and retailers selling on their platforms. They are actually rather scornful of the retailers, but they want brands and manufacturers on the platform to build up stock.

Mike (00:01:58): One of the latest moves is that Shein has opened a new center in Barcelona. They’re serious and it’s intensifying. Spain is quite an interesting market. I want to talk about Temu in a second, but is there anything you want to add here, Chris?

Chris (00:02:39): To all the listeners interested in the German e-commerce market, there is some news: the China e-commerce market grew again quite substantially. Most of that growth is coming from the big Chinese players. The landscape hasn’t changed; they have massively deep pockets and can operate at a loss per conversion for quite some time. Since domestic demand in China is not as strong as it used to be, their growth strategy is to go into new markets, and Europe has become a major one. For online retailers based in Europe, times will get tougher.

Mike (00:03:50): It feels so asymmetrical. How often do you hear about brands or retailers from Europe or the US successfully entering the Chinese market—or even wanting to because they can’t? China is probably not playing a fair game here.

Chris (00:04:14): You can look at any industry, like the car industry. Everyone is struggling in China; there was a 40% year-over-year drop in the first two months. They have to unload their mass in new markets, and Europe is one of them. At the end of the day, I don’t know how much European online retailers can do here. It’s also about the consumer—are you willing to buy this stuff?

Mike (00:04:50): The numbers confirm that people are willing. Let’s move on to JD. JD is expanding into Europe aggressively with their Joybuy platform.

Chris (00:05:17): They’re acquiring local players like MediaMarkt. As soon as I found out they were launching in Europe, I thought, “Hold on, they must be buying Google Shopping ads.” You can’t launch in Europe without them. We’ve seen similar things with AliExpress and others. Even Trendyol, which is a Turkish platform but largely owned by China, is pushing hard in advertising in Eastern Europe as a testing ground.

Mike (00:06:35): I looked into Joybuy. In March, they were an account-level competitor for over 6% of the accounts I checked. That’s not a huge number yet, but it’s not nothing, and the trajectory is what matters.

Chris (00:06:55): The concern is the momentum. Will we end up with Temu 2.0? Rising CPCs are the dark cloud every retailer suffers from. A player who doesn’t care about returns, especially for new clients, will trigger CPC inflation. It’s not good news.

Mike (00:07:37): It’s like the US housing market where institutional investors buy homes; it just doesn’t feel fair. If JD starts fighting Temu in Europe’s e-commerce advertising, it gets ugly.

Chris (00:08:22): Temu is active everywhere. We talk to clients who think Temu isn’t a factor for them, and then they see they are literally everywhere. Another big player from China will likely lead to rising CPCs. You can’t control certain things, but you must do your homework. Squeeze everything out of the algorithms on Google and Microsoft. Let them work as smart as possible for you because the environment won’t get easier.

Mike (00:09:35): These details matter. Every advertising dollar needs to be prioritized. You’re fighting wars of attrition.

Chris (00:10:02): I listened to a podcast about Nietzsche yesterday. Every sentence he wrote had a purpose. Everything you do as an e-commerce expert needs a purpose. Don’t be lazy; it won’t get easier.

Mike (00:10:31): These pressures can become existential. At a campaign level, everything you do needs a reason to exist as part of that strategy. These big players with deep war chests won’t go that last mile.

Chris (00:10:51): You can still do things to outsmart the competition, but there isn’t much good news from the Chinese e-commerce front.

Mike (00:11:28): Let’s talk about monthly active users (MAU). I visit the Temu transparency center where they are required by European regulation to submit facts. In the second half of 2024, they grew 12% compared to the previous period. That seems flat considering seasonality, but they’ve already captured a lot of market share. Germany and France grew at 8-9%, while Italy and Spain grew at 16-17%.

Chris (00:13:13): Spain and Italy feel undefended. They don’t have clear homegrown incumbents like Zalando in Germany or Allegro in Poland. The “Zalando of Spain” is just Zalando. Do you have numbers for the Netherlands?

Mike (00:14:02): The Netherlands saw 9% growth, similar to France.

Chris (00:14:29): Regarding Poland, I also calculated market share. I took Temu’s MAUs and divided them by Eurostat’s data on e-commerce users. Overall for Europe, Temu has a 40% market share. People choose to buy from Temu a lot.

Chris (00:16:14): I’m out of words. The business model works, but it’s not a fair race. It’s asymmetrical. No big brands are successfully going to China—look at Starbucks or Apple.

Mike (00:17:05): China has benefited from Apple’s manufacturing, but Apple having China as a consumer market hasn’t really worked. There’s a book that claims Apple invested more into the Chinese economy than the volume of the Marshall Plan.

Mike (00:18:19): Back to market share: Germany is their largest single market at 44%. France is at 42%, Italy at 59%, and Spain at 49%. In Poland, it’s 71.1%.

Chris (00:18:52): That Poland number is crazy, especially since they have a strong marketplace with Allegro. I heard Allegro is doing fine and projecting growth for 2026, but 71% is nuts.

Mike (00:19:17): Allegro is growing at 7-10%, and Temu is growing at 8% there. If you’re any other business in Poland, you have an issue.

Chris (00:21:04): Let’s talk about the future of e-commerce. We’ve said that down the line there will be zero-click events where purchases happen within the ad environment, making the retailer just a warehouse. The recent UCB (Universal Campaign Behavior) update is a sign of Google doubling down on that.

Mike (00:22:03): On January 3rd of last year, Google submitted a patent that was granted in late January this year. It’s titled “AI-generated content page tailored to a specific user.” It’s about personalized landing page replacement. Google will score your landing pages, and if yours doesn’t make the cut, they will “vibe code” a replacement landing page on the fly that the user will be directed to instead.

Chris (00:24:24): Who decides if my landing page makes the cut? Is that transparent to the retailer, or is it solely in the power of Google?

Mike (00:24:47): The system decides. It can hallucinate a landing page into existence at auction time. It evaluates your page and replaces it. It’s scary.

Chris (00:25:33): Is this landing page still hosted by the retailer, or is it in the ad system?

Mike (00:25:54): It’s within the ad ecosystem; it’s basically an expanded ad unit. The user thinks they are clicking through to your site, but they are in an expanded ad. The landing page is part of the ad. It might reflect some of your branding, colors, or fonts, but it’s not a 1-to-1 clone. Google can make this decision based on conversion rate, CTR, bounce rate, or qualitative factors like design quality.

Chris (00:27:14): This is highly intransparent. You’re completely in the hands of Google.

Mike (00:28:57): In some instances, users can even complete a purchase on that landing page.

Chris (00:29:20): This is massive forward integration by Google. They’re telling retailers, “If you have problems with your website, don’t worry, we took care of it.” I wonder what Shopify thinks. There’s apparently no opt-out mentioned in the patent.

Mike (00:30:40): Since it’s personalized, Google can use browsing history and in-market signals to reflect context better. This is part of what I call “PMax-ification”—automated bidding, targeting, creative, placements, and now automated landing pages.

Chris (00:32:21): How can a retailer differentiate? The website is the core of their business. If this isn’t on your web property, you lose your tracking and session data. It fuels the hypothesis of the zero-click buy event.

Chris (00:34:06): I’m rather negative on this one.

Chris (00:34:40): Time flies, Mike. Let’s wrap it up. Problems are more fun than solutions, but we don’t have a solution here yet.

Mike (00:35:02): This has been a production of Smarter Ecommerce, also known as smec. To learn more, visit smarter-ecommerce.com. If you enjoyed this conversation, please follow us or give us a like on social media. We’ll see you next time.