Backed By Evidence
If you cover the eCommerce space in any capacity, then you’ve almost certainly been made aware of Temu at some point over the past year. The Chinese eCommerce company, owned and operated by Pinduoduo, launched in September of 2022 and has exploded onto the eCommerce scene in a dramatic fashion. Towards the beginning of 2023, we began to receive inquiries from clients asking if we had done any survey work on the company. We immediately got to work and launched our first wave of a Temu-focused consumer survey to gather insights. Since that initial launch back in January, we have launched two more waves of the survey, added questions on Temu to both our domestic and Chinese eCommerce surveys, launched a brand new eCommerce survey with specific focus on Temu, TikTok, and Shein, ran identical item pricing analyses on Temu vs. Amazon vs. Shein, and hosted a webinar covering insights from all of these. This post will contain data from all of the aforementioned reports and will hopefully give you a clearer image into how the consumer views both Temu and the broader eCommerce market. Let’s dive in…
The first report that we’ll cover will be the Temu-specific consumer survey. We first launched this survey in January, and have released three subsequent volumes since with our most recent being launched in July (be on the lookout for the fourth wave in the coming weeks). Over the course of the survey, we’ve seen consumer awareness of Temu increase sharply, with the share of consumers who have shopped on Temu increasing sequentially as well.
Temu shoppers indicate that they are primarily using the eCommerce platform for clothing and shoes. The share of customers who note that Temu has replaced their shopping on other platforms has increased over the course of the survey. When asked about what platforms are being replaced, customers noted sites such as Amazon, Shein, Wal-Mart, and Wish. Other platforms in which Temu customers have a high degree of cross-over with include Wayfair, Zara, H&M, and Burlington.
Temu customers point towards the low cost of the products as the primary thing that they like about the company, and they indicate a much higher likelihood of using it for low-cost items going forward as opposed to higher costing items. Customers over-index as female, lower income, and younger relative to the broader population.
When you think of the eCommerce market, names such as Amazon, Etsy, and Wish typically take up the majority of consumer mind-share. With the introduction of platforms like Temu over the past year, consumers have begun to turn their heads in favor of newer options. Even social media platforms like Instagram and TikTok have entered the market by integrating their own shopping platforms into their respective apps. The majority of these newer platforms are coming from Chinese companies entering the space. To account for this, we ran a domestic survey with specific focus on Temu, TikTok, and Shein to gauge just how much they’re affecting the broader eCommerce market. We ran this survey in addition to our domestic and Chinese eCommerce surveys that we refresh quarterly.
Interestingly enough, we found that respondents who are familiar with Temu and Shein were most likely to have heard of these platforms for the first time on Facebook. After Facebook, respondents cited hearing of them for the first time through word of mouth and on TikTok.
There’s a great deal of crossover between the user bases of TikTok and the user bases of Temu & Shein. TikTok users reported that they would generally have a strong degree of interest in seeing an eCommerce tab within the TikTok app and over time, have shown that they have an increasingly positive opinion of buying products through social media. Temu and Shein customers who also have TikTok accounts are especially likely to be interested in this.
Now despite the increasing positive sentiment towards these newer platforms, legacy ecommerce companies such as Amazon and Etsy typically are seen as more trustworthy than Temu, TikTok, and Shein.
Now that we’ve spent some time talking about how consumers in the U.S. view the various eCommerce platforms, it’s time time to take a look at how Chinese consumers view them.
When asked whether or not they felt a cohort of eCommerce companies were gaining or losing in popularity, consumers over the last quarter generally feel as if Pinduoduo is gaining popularity while the likes of JD.com, Taobao, and Vipshop have been viewed as losing popularity.
When asked of their future plans for increasing or decreasing spending at a plurality of eCommerce platforms, Chinese consumers point towards decreasing spending across the board. When we inquired about which platform consumers purchase the most apparel, JD.com won out market share by a pretty significant amount with 44.1% of respondents stating that that is where they most commonly shop at. JD.com was followed by Taobao (19.8%) and Pinduoduo (10.3%).
When discussing the Chinese eCommerce market, it would be tough not to bring up Alibaba. The Chinese-based platform has dominated the global eCommerce market for years but has shown some signs of slowing lately. The plurality of consumers that noted that they shopped on Alibaba “often” dropped sharply over the past quarter while the share that shop “occasionally” rose. Now while this may be an indication of consumers jumping ship to other platforms, it should be noted that 36.5% of respondents last purchased products from Alibaba in the last week and 30.5% of respondents note that they purchased more than three items from the platform in the past month.
Identical Item Pricing Analysis
We’ve been running pricing analyses on Amazon vs Wayfair and Amazon vs Chewy for some time now so we felt as if it was only right to launch an analysis on Temu vs Amazon vs Shein, as market share for these platforms has increased so dramitacally.
We started off by collecting pricing data from 100+ identical items that we found on both Temu and Shein. We began the process by browsing the Temu’s most popular items section. We then searched for the same product text on both Shein and Amazon. If we were able to find the item on Shein then we included it in the analysis. We then looked for the same item on Amazon to see if it was available or not, and to compare pricing. The images for Temu and Shein were almost always identical while the Amazon images were either identical or very close matches.
We found that of the identical items found on both Shein and Temu, 67% of them were cheaper on Temu. We then checked if they were also available on Amazon. We found that 57% of the items that we searched for were also available on Amazon. Of these items, 96.5% of them were cheaper on Temu and 89.5% of them were listed at a cheaper price than on Amazon.
We hope that this deep-dive provided you with some notable insights into Temu and the broader eCommerce market. If anything in this post peaked your interest and you’d like to learn more, feel free to reach out to us by emailing [email protected]. We’ll be refreshing our eCommerce surveys in the coming weeks so be on the lookout!
Each quarter we run a survey tracking consumer trends within the fitness industry. In the latest wave of the survey, we did tons of deep-dive work on Peloton to better understand their customer demographics and how consumers view the company.
Of all of the fitness brands that we tested in the survey, Peloton was the most likely to be viewed as “more for wealthy consumers” as opposed to “accessible for all.” To add to this, there is a significant level of divergence in how Peloton is viewed by existing customers and how the broader pool of consumers view the company. Existing customers see Peloton as a high quality, luxury fitness brand while the majority of the broader consumer population sees it as just an expensive fitness trend. That being said, over the course of the survey there has been some degree of gradual decline in the share of consumers who view the company as a “luxury” brand.
The share of consumers who are aware of Peloton but do not own any products from them are more likely to view Peloton as an overall fitness and wellness company, as opposed to just a fitness bike company. Among consumers that do not currently own any Peloton equipment but are considering buying some, an increasing share expressed interest in purchasing the bike while a declining share expressed interest in the tread. Overall fitness product interest is on the upswing after reaching a series low in October of 2022. The data isn’t where it was during Covid, but has improved relative to recent history.
Back in May, Peloton announced a brand relaunch that included revamping their app by adding a tiered subscription feature. Peloton encouraged people to use the app even if they did not own Peloton products, so we asked consumers how interested they’d be in using the Peloton app without owning any of the equipment. We set a baseline level of interest in the share of non-Peloton equipment owners and found that around 15% of these respondents would either be “interested” or “very interested” in using the app despite not owning any equipment. Of the cohort of consumers that does own Peloton equipment, the share of them that only use the Peloton app has increased in recent quarters.
On Tuesday, September 19 2023, Instacart became the first venture-backed tech company to IPO since 2021. The stock opened trading at $42 a share, 40% higher than $30 a share which was initially anticipated and closed out its first day of trading at $33.70 a share. Investor sentiment has been wary as market conditions have not been ideal for growth-heavy tech companies.
Here at Bespoke, we published a survey and did some cross-tab work on CART consumers to see how the grocery delivery service is viewed through the lens of a customer. Sharing some key takeaways below..
- Instacart usage surged higher during the pandemic. Since peak engagement , the share of respondents who use the service on a regular basis has regressed back to pre-covid levels. The share of consumers who state that they use it on an occasional basis, similarly surged higher during the pandemic, but has held more or less steady since.
- Overall awareness of Instacart has increased considerably since January of 2018
- Instacart users have been less likely to order from Amazon Prime since the beginning of 2022 (monthly usage of Instacart has increased slowly over time). That said, the share of Instacart users who did not have groceries delivered at any point in the past month has increased during the same time period.
- During the pandemic, Instacart user demographics shifted towards being more male than female and older cohorts adopted usage in a major way, as did higher income bands.
Excerpt of Charts:
Every quarter, we launch a survey covering social media names as a means to track consumer sentiment. Back in July we published the 40th volume of the survey. We aimed to understand specific trends within the space and had numerous questions relating to usage of Instagram Threads. Let’s dive in…
- Relative to other social media platforms, Threads users are more likely to skew male, skew younger, and skew liberal (political affiliation)
- Among the base of users who have downloaded it, feedback has come back generally positive
- NPS among those who have downloaded Threads came back at 30, a high score but from our experience, lower than what is expected from a new platform.
Social Media Sector and App Specific Trends:
- Consumer trust in social media platforms has improved sequentially and self-reported engagement with social media apps is improving
- Concerns about privacy issues continue to subside. Awareness is there, nut each quarter there is less concern
- Consumers offer increasingly positive sentiment toward buying products through social platforms
- Twitter user have a net favorable view of Elon Musk owning the platform
- Instagram Reels feedback has improved sequentially
Back in January, we published an article on Carvana named “Is Carvana Over? The Consumer Angle.” At the time the stock was trading at around $4.20 per share and there was serious concern that the company would have to file for bankruptcy. Since the time we published that article, Carvana’s stock rose to a high of $57.19 and is currently trading at around $47 per share. In the article we chose to take a different perspective from what we were seeing from the financial community at the time, and decided to deep dive into how customers actually felt about the company. We’ve continued to track consumer sentiment toward Carvana throughout the year by means of a 10,000N survey that we refresh quarterly, and if there’s one thing that we’ve come to realize, it’s that consumers really enjoy the Carvana experience.
This is not to say that we were “right” or that the company no longer faces the headwinds that it did in January (i.e. threat of bankruptcy, problems with unit economics, etc.), it’s simply a way of showing how the use of surveys to track consumer demand can provide a differentiated perspective on a company.
We published the latest refresh of the survey last week and consumers felt more or less the same as they had in January about their experiences using the online auto retailer. When it comes to competitive dynamics, Carvana ranked near or at the top in terms of things like pricing, selection, and overall trust, NPS for selling a car to CVNA has improved since January and currently sits at 58, which is a very strong score. NPS from those who bought from Carvana also improved and currently sits at a series high of 69.
Customers stated that the convenience of Carvana is what they enjoy the most about purchasing a car from them. Since the early waves of this survey, Carvana customers have grown less and less likely to visit a dealership before buying from Carvana. Customers firmly believe that Carvana is a better experience than a dealership, and indicate a high likelihood of shopping for a car there again in the future.
Simply put, customers that use Carvana love the experience and consumer adoption of buying used cars online are still in the early innings.
Excerpt of Charts:
With student loan repayments set to resume in October, there have been questions as to how individuals that are straddled with student debt will react to having to pay off their loans every month. How will discretionary spending change as they resume? What industries will be affected the most? We ran a survey on US Consumers to dig deeper on this.
Since the pause on student loan repayments was enacted, a large portion of individuals with loans say that they have not made any payments during the period. 34% of the respondents who paused their federal loan payments said that they increased their discretionary spending because of it. We cross-tabbed our responses by age and found that an overwhelming portion of those who have been spending more, are likely to fall within younger age cohorts (recent university graduates). Of these respondents that paused their payments, a large portion stated that they would have to cut back on their discretionary spending once they resume. The top things that these respondents called out as something they would cut back on include eating out/food, clothing, and streaming subscriptions. Respondents who increased their spending during the pause period have a generally more optimistic view on their personal finances than those who paused their payments and did not increase spending.
We have a number of consumer spending categories throughout the report that show consumer activity by their status with federal student loan payments. We currently have another survey on student loan debt with a much larger N size that we’ll be launching at the end of this week as well. This is a topic we’ll be looking to track a lot more going forward as the pause comes to an end, so if you have any interest in gaining access to our most recent report or any of our future reports, please let us know. Sharing some relevant color below.
Start a trial with us today to get plugged into upcoming results…
Of all of the eCommerce platforms that we run survey and pricing analysis on, Wayfair continues to show up as one that consumers are more likely to shop at episodically. A large plurality of Wayfair customers stated that they primarily purchase goods from the website when they’re moving or looking to move. This poses the question as to whether or not Wayfair will struggle in the midst of a potential housing crisis. As mortgage rates continue to climb and seize up the housing market, there’s real worry for a company that relies so heavily on selling into a demographic of consumers on the move.
Our latest report is a pricing analysis that compares the cost of identical goods visually matched on both Wayfair and Amazon. We’ve run this analysis over the past 14 quarters and this particular quarter shows an interesting inflection in the data given the current backdrop.
Sharing some sample data below. Start a free trial today to access the readings from August and May of 2023.
Consumer opinions of BBWI have typically been relatively positive in our survey. The customer base has been with the brand for a while and it has strong unaided and aided awareness across multiple categories. In the past year, NPS has pulled back a touch, but in all, consumers really like the retailer.
One thing we are constantly on the lookout for when we analyze survey results across hundreds of companies that we cover is when one of them seems to buck a trend we are seeing elsewhere. It is no secret that online shopping engagement has increased in many sectors. It is usually either the preference of consumers or it has at least been gaining share as the preferred method of shopping.
What sticks out to us about BBWI is the degree to which customers prefer to shop it in-stores, as opposed to online. Not only is the degree of in-store preference stronger than most other retailers we run surveys on, that preference actually increased over the past 12 months.
BBWI is a name that we’ve noticed increasing interest in lately from the buyside. If you’d be interested to learn more about the name via our survey, request a trial below.
If you cover consumer in any way shape or form and don’t know about Temu, what kind of rock have you been living under?
We first heard of Temu late last year. We didn’t know much about it at the start – just that it was a really fast growing app and that the investment community was starting to notice. Earlier in the year when buyside folks would talk to us about the work we were doing and we mentioned Temu, most of them had never heard of it. Then a couple weeks later they’d circle back telling us that they were noticing the app more and more. Now, Temu is one of the topics we get asked about most often when folks are looking for survey data from us.
The charts below offer some color from our latest survey work on Temu, but it is only a small part of what we have…
Request a free trial today to see competitive analysis on which peers Temu is impacting the most, to see cohort level data, and much more…
We’ve all seen or heard the saying a number of times in investing circles… something to the effect of, if you are right and everyone else is wrong, it really doesn’t matter that you are right until eventually everyone else realizes it. If that moment doesn’t come, you can be logically right about something but wrong on paper when it comes to the P&L behind the idea. And tragically, the crowd has proven that it can go along being wrong for quite a while (even indefinitely).
If there is one thing we’ve learned after helping buyside analysts and PMs for 10+ years now, it is that they are very far from your average consumer. The average consumer can be messy – not always incredibly logical, sometimes reactionary and overly emotional, short-sighted, and sometimes uniformed or impulsive. Hedge fund analysts tend to be more analytical, disciplined, logical, and methodical. Stop me if you can see where we are going here, but there can be a disconnect between how a hedge fund analyst and the average consumer thinks and oftentimes you can park more than a truck between them. The trouble is that the sentiments and behaviors of the average consumer often underpin buyside investment theses, and you can’t bend them to your will with logic.
Every line item in a model is laboriously toiled over and countless dollars are spent on external data to gain marginal improvement in precision. Those data inputs are viewed as “need to have” because you can mathematically calculate the ROI of having that data in a post mortem analysis/backtest. If you move further toward the beginning of the idea funnel – it is harder to mathematically calculate an ROI on the inputs you use to generate ideas and to create a foundation of knowledge that will impact every assumption in your model.
Focusing on the idea gen, thesis support, and knowledge foundation – we believe there is opportunity both in the under-investment in data for that part of the funnel and in the disconnect between how institutional investors think and how the average consumer thinks.
The net/net of all of this, is that if you are investor you should consume more survey data and run more of your own custom surveys.
Request a trial to explore our library of surveys or contact us if you have any custom survey needs ([email protected])… you’ll be hard pressed to find a larger library of buyside generated surveys out there or a vendor that will get you high quality data at a faster speed.