Analysts at MoffettNathanson have observed in a Thursday note that China-based e-commerce companies are increasingly venturing into Western markets, undercutting prices on domestic e-commerce platforms.
One such example is Temu, an online marketplace operated by a Chinese e-commerce company PDD Holdings (PDD), seeking to sidestep traditional distribution channels and look for growth beyond their home territory.
“If these trends continue unabated, how will domestic e-commerce platforms continue to be impacted?” analysts at MoffettNathanson asked.
“However, with the U.S. political machine circling in on Temu, Shein, and de minimis shipping, it’s also worth considering the winners and losers from a reversal in the status quo,” they added.
The broker explored which marketplace players may stand to benefit from the evolving mix of e-commerce sellers.
One of the companies mentioned is eBay (NASDAQ:EBAY) (EBAY. Given its lower commission rate of around 14%, the company might become a favored avenue for Chinese merchants seeking to expand their international footprint beyond platforms like Temu or Shein, analysts said.
Etsy (NASDAQ:ETSY), meanwhile, this trend represents “a clear headwind but fortunes could improve.” analysts said.
“The company is actively removing an elevated level of mass merchandise and our research indicates they’ve been effective, a potential boost to gross margins. There are also
risks, Etsy could lose on-site advertising revenue,” they wrote.
Lastly, Amazon (NASDAQ:AMZN) remains shielded from Temu's impact, thanks to its vast inventory, Prime benefits, and quick fulfillment, though long-term implications remain uncertain.