By Zainab Shafiq 
Fast-growing e-commerce platforms, Temu and Shein, make a strong move into the toy market this holiday season. Known for affordable clothing and home goods, now both platforms are trying to take a larger share in the global toy market with a worth of $108.7 billion. As budgets are stretched for holiday shopping in both the U.S. and Europe, Temu and Shein are coming to the fore as dark horse players in the toy game.
In the past, toys were not the first thing that came to the minds of buyers when thinking of Temu and Shein. These mobile app-based platforms have been better known as digital “dollar stores,” offering low-cost, unbranded items. However, with growing consumer interest and the holiday season in full swing, both are quickly adapting to meet demand. Temu and Shein face scrutiny over counterfeit concerns but continue to draw more shoppers, particularly those seeking affordability during economic challenges.
Toys have become a quickly growing category for Shein with double-digit sales growth year-over-year. A Shein spokesperson said that the growing popularity was partly due to the platform’s ability to cater to cost-conscious consumers. Temu has reported an increase in toy-related searches, showing rising interest among its shoppers. Direct competition is now being exerted by these platforms versus retail giants like Amazon, Walmart, and Target, which currently hold the U.S. market for toys.
According to Kantar, the number of U.S. holiday shoppers planning to buy gifts on Temu has risen to 13% this year, up from 9% in 2023. Additionally, credit card spending on both Temu and Shein has significantly increased, underscoring their growing appeal.
Both e-commerce giants primarily attract shoppers with annual incomes below $50,000, a demographic hit hardest by rising living costs. Their low price and wide product range are attractive alternatives to traditional brick-and-mortar retailers. In Europe, young shoppers between 18 and 34 years old are highly attracted to these platforms. According to a Circana study, 39% of European buyers purchased toys on platforms such as Temu, Shein, or AliExpress this year, up to 60% of whom are the younger generation.
Temu and Shein Face Counterfeit Concerns and Industry Scrutiny
Large toy companies, for instance, MGA Entertainment, the home of L.O.L. Surprise! Dolls and Spin Master, the creator of the “Ms. Rachel” doll, has taken notice of Temu and Shein. Companies view the platforms as an opportunity to reach new markets, while other companies are hesitant about counterfeit products that may cause safety to children, as seen in knock-offs from MGA. Temu and Shein say they have strict policies for not selling counterfeit products, and they take action without delay when they are made aware of the violations.
Toy distributors such as Popmarket are increasingly using Temu and Shein as marketplaces to reach budget-conscious consumers. Popmarket, for example, has seen more sales of low-cost toys on Shein than it anticipated and will expand to Temu after the holiday season. As Shein offers fee waivers for new sellers and Temu opens its platform to U.S.-based sellers, the two e-commerce giants offer a great opportunity for smaller toy makers to enter the digital market.
Despite the issues of counterfeit products, Temu and Shein are changing the holiday shopping trends. The platforms are capturing the attention of cost-conscious shoppers worldwide by offering affordable alternatives and expanding into new product categories. As they gain traction in the toy industry, traditional retailers and manufacturers will likely need to adapt to this changing landscape.
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