As holiday shoppers across the U.S. and Europe hunt for bargains, e-commerce platforms Shein and Temu are emerging as unexpected players in the toy market. Traditionally known for selling affordable clothes and household items, these fast-growing platforms are expanding into toys, aiming to capture a share of the $108.7 billion global toy market.
A Shift in Holiday Shopping Habits
Historically, major retailers like Amazon, Walmart, and Target dominated toy sales, accounting for nearly 70% of the U.S. market. However, Shein and Temu are increasingly attracting budget-conscious consumers, particularly those earning less than $50,000 annually. With inflation straining wallets since 2021, many shoppers are turning to these platforms for low-cost alternatives.
In 2023, 13% of U.S. holiday shoppers planned to buy gifts on Temu, up from 9% the previous year, according to Kantar. Shein, famous for its $5 t-shirts, reported double-digit growth in toy sales year-over-year, while Temu noted a surge in toy-related searches. European shoppers, especially those aged 18 to 34, are also embracing these platforms, with 39% buying toys or games from Shein, Temu, or AliExpress in 2023.
Bargains Come with Challenges
Despite their growing popularity, Shein and Temu face scrutiny over counterfeit goods. Listings for Mattel’s Uno card game and Hot Wheels toy cars have appeared on the platforms, despite the company not authorizing sales there. While both platforms claim to enforce strict policies against counterfeit products, concerns remain about safety standards, particularly for items marketed to children.
Spin Master, the creator of the “Ms. Rachel” doll, flagged fake versions on Temu and Shein that lacked proper safety testing. MGA Entertainment, the maker of L.O.L. Surprise! dolls, is in talks with the platforms to address knock-offs of its new Miniverse line. These counterfeits, which may not comply with safety regulations, could pose choking hazards for children.
A Growing Marketplace for Toy Sellers
Shein and Temu are not just attracting shoppers but also toy distributors. Companies like Popmarket are increasingly listing items such as Funko Pop figurines and Hasbro G.I. Joes on these platforms, drawn by low seller fees. Shein offers to waive fees for new sellers for three months, followed by a 10% commission. Temu, previously invite-only, recently opened its marketplace to all U.S.-based sellers.
However, not all manufacturers are ready to embrace these platforms. Fat Brain Toys’ president, Mark Carson, expressed hesitancy, emphasizing that joining the platforms must align with his company’s long-term strategy.
The Road Ahead
As Shein and Temu continue to disrupt the e-commerce landscape, they must address the challenges of counterfeit goods and safety compliance to build trust with consumers and manufacturers alike. Their low-cost model appeals to price-sensitive shoppers, but maintaining quality and brand integrity will be key to sustaining growth in the competitive toy market.
With holiday spending surging, these platforms are proving that they’re more than just digital “dollar stores.” Whether they can become reliable players in the toy industry remains to be seen, but for now, they’re carving out a significant niche in the global retail ecosystem.
