📈 The Rise of Teemu: How Cheap Prices and Unfair Advantages are Hurting US Businesses
In less than a year, Teemu has already gained one-third of the monthly active users of Amazon. With prices as low as $3 for a pair of shoes and $5 for a woman's sweater, it's no wonder that Teemu is gaining popularity among shoppers. However, Wired Magazine's analysis of the company's supply chain costs shows that Teemu is losing an average of $30 for every order made. In addition to the US, Teemu also operates in Canada, Australia, and New Zealand, and is estimated to be losing between $588 million to $954 million every year. But the real question is whether this is affecting US businesses.
🤔 Is Teemu Hurting US Businesses?
According to Jerry Kak, who runs an online store selling T-shirts both on Amazon and a Shopify store that makes over eight figures per year, companies like Teemu and Shien are taking sales away from his company, especially on Amazon. Since Teemu and Shien burst onto the US scene in 2022, Jerry's business has cratered by nearly 50%. However, other apparel and T-shirt companies and e-commerce communities that belong to are down year-over-year as well. So, right now, companies like Teemu and Shien seem to be mainly hurting lower-end apparel businesses and companies without a powerful brand or intellectual property.
💰 Teemu's Advantages
Teemu has two gigantic advantages that US companies do not have when it comes to making and selling apparel. Firstly, they have a huge cost advantage over US sellers because of extremely low labor costs. Secondly, they have the dominous loophole that allows Chinese sellers to not have to worry about paying taxes, tariffs, or customs duties. Any shipment sent into the US that is valued at less than $800 does not have to pay any taxes whatsoever.
🚫 The Dark Side of Teemu
However, products made in China's Western province of Sang are being sold to US consumers through Teemu in breach of a ban that forbids goods from being imported from the region due to links to forced enslave labor. Statements from former detainees and reports from an array of researchers and advocacy groups have alleged that the Chinese government put more than 1 million people in detention camps in that region, and that laborers in fields and factories were forced or coerced to make cheap products for Teemu. The Chinese government has said that the camps are for re-education purposes, but no one knows for sure. Slave labor could be one way that Teemu is commanding such low prices.
🤝 How Can US Businesses Fight Back?
If you are selling commodity products that do not have a strong value proposition, you probably aren't going to survive, regardless of whether Teemu or Shien exists. For example, if you're selling generic T-shirts that are easily copied by manufacturers from China who have a cost advantage over you, you're just not going to make it. But if you can tap into the emotions of your buyer and establish a strong brand, you'll survive regardless of pricing pressure.
🏆 The Power of Branding
True Classic Tees is a company that sells generic solid color T-shirts, which is probably one of the most saturated and competitive niches out there. But they brought in over $250 million since they opened in 2019. How does a blank T-shirt company that sells plain shirts for $25 a pop make so much money? It's all about the marketing and how they make consumers feel about their product. Selling online is all about triggering the emotions of your consumer, and it's not all about the price.
🤑 Conclusion
Teemu is a junkyard that sells cheap generic products from China, and their rock-bottom pricing is affecting the apparel industry the most because apparel is a commodity, and most clothing, especially on Amazon, is generic and unbranded. As a small business owner, you can succeed by niching down and going for the high end. If you are competing purely based on price, you've already lost.
📝 FAQ
Q: Is Teemu a legitimate company?
A: Yes, Teemu is a legitimate company that operates in the US, Canada, Australia, and New Zealand.
Q: Is Teemu hurting US businesses?
A: Teemu is mainly hurting lower-end apparel businesses and companies without a powerful brand or intellectual property.
Q: How can US businesses fight back against Teemu?
A: US businesses can fight back by niching down and going for the high end. If you are competing purely based on price, you've already lost.
Q: Is Teemu using slave labor to make their products?
A: Statements from former detainees and reports from an array of researchers and advocacy groups have alleged that the Chinese government put more than 1 million people in detention camps in that region, and that laborers in fields and factories were forced or coerced to make cheap products for Teemu.
