As Black Friday and Cyber Monday approach, Amazon sellers in the toy category are facing unexpected sales declines. This phenomenon reflects broader challenges in cross-border e-commerce, with TEMU's rapid growth rewriting industry rules through aggressive pricing and viral marketing strategies.
Unseasonal Slump: Behind the Declining Sales
Seller M, a veteran Amazon toy merchant, typically sees significant sales growth starting in October. With years of positive reviews and brand recognition, their store historically maintained strong performance. However, this year marks their first seasonal decline - total sales over the past 30 days reached $627,900 (approximately $20,000 daily), representing a 1% month-over-month drop and 9% year-over-year decrease.
Compounding the issue, high return rates and optimistic inventory planning have created financial pressures. Another seller reported untenable advertising costs, with Amazon's suggested bids reaching $6-$25 for products priced under $30, creating unsustainable "lose-money-per-sale" scenarios.
TEMU's Disruption: Price Wars and Viral Growth
The sales downturn stems from multiple factors. Consumers have become more price-sensitive, comparing options extensively before purchasing. Meanwhile, TEMU's emergence has diverted substantial traffic from Amazon through cutthroat pricing.
TEMU's "free Christmas products" campaigns have spread virally across social media. Users share referral links to recruit new members in exchange for holiday gifts. Promotions like "Accept invitation to win $50 together" leverage seasonal demand to fuel sharing. This user-driven growth model has rapidly expanded TEMU's customer base while pressuring established platforms.
Strategic Implications: Data Comparison
Key metrics highlight TEMU's market impact:
- Customer Acquisition Cost: TEMU's social-sharing model likely achieves lower CAC than Amazon sellers' rising ad expenses
- Conversion Rates: While TEMU generates massive traffic, its conversion may trail Amazon's established trust
- Average Order Value: TEMU's rock-bottom pricing contrasts with Amazon sellers' premium product strategies
- Customer Retention: TEMU must sustain value to maintain users, while Amazon leverages Prime loyalty
Adaptation Strategies for Amazon Sellers
Merchants can implement several countermeasures:
- Channel Diversification: Expand beyond Amazon to independent sites and social commerce
- Operational Refinement: Optimize listings through detailed customer analytics
- Differentiation: Compete on quality and service rather than price
- Brand Development: Strengthen brand equity to build consumer trust
- Supply Chain Efficiency: Reduce costs through logistical optimization
- Competitive Monitoring: Track TEMU's evolving tactics
The New Cross-Border Reality
TEMU's ascent signals a market transformation where price alone no longer guarantees success. Brands must balance affordability with quality, service, and customer experience. For entrepreneurial operators, this disruption presents opportunities to reevaluate traffic strategies and business models. The future belongs to agile businesses that can adapt to these evolving dynamics while maintaining customer-centric approaches.