Fast-growing e-commerce platforms like Shein and Temu are deepening their foray into the toy market, catering to the growing demand for holiday bargains as shoppers prepare for the Black Friday weekend. Previously, these platforms, which mainly operate through mobile apps, were not known for selling toys or holiday gifts. Now, both companies are looking to claim a larger share of the global toy market, which saw $108.7 billion in sales worldwide in 2023, according to Circana.
Shein, which initially gained popularity by selling low-cost clothing, has seen significant growth in toy sales, with toys becoming one of the fastest-growing categories on the platform. The company reported double-digit growth in toy sales year-over-year. Similarly, Temu has noted a rise in toy-related searches as more shoppers turn to these platforms for their purchases.
While traditional mass retailers like Amazon, Walmart, and Target still dominate the U.S. toy market, representing nearly 70% of toy sales, Temu and Shein are beginning to capture a larger portion of the market. According to Kantar, the percentage of U.S. holiday shoppers planning to buy gifts on Temu has increased to 13%, up from 9% the previous year. Additionally, credit card spending on both platforms has risen in 2024, compared to the same period in 2023.
The surge in toy sales on these e-commerce sites has garnered attention from major U.S. toy manufacturers, including MGA Entertainment, known for its LOL Surprise! dolls. MGA’s CEO Isaac Larian stated that the company is considering selling on Temu and Shein to expand its reach to more shoppers.
Shein and Temu are particularly appealing to consumers with annual incomes under $50,000, many of whom are turning to online shopping for affordable options amidst rising consumer prices since 2021. In Europe, younger shoppers, particularly those aged 18 to 34, are also increasingly buying toys on these platforms, with a study by Circana showing that 39% of European consumers have purchased toys from Temu, Shein, or AliExpress this year.
Despite their popularity, Shein and Temu are facing concerns from toy manufacturers about counterfeit products, known as “dupes.” Some listings on Temu and Shein, such as for Mattel’s Uno card game and Hot Wheels cars, have falsely claimed to offer authentic items. While Shein requires its suppliers to certify their products as non-infringing, it has faced issues with counterfeit goods being sold on its platform. Temu, after being alerted by Reuters, removed listings for the Uno card game and promised an investigation.
The platforms are also becoming more attractive to toy distributors. For instance, Popmarket, which sells products like Funko Pop figurines and Hasbro toys, has seen strong sales on Shein and plans to expand its presence on both Shein and Temu. To incentivize sellers, Shein is offering a fee waiver for new sellers during the first three months, with a 10% charge afterward. Temu has also opened its marketplace to U.S. sellers this month, after initially requiring invitations.
However, the rise of counterfeit toys is a major concern for toy makers. MGA is in discussions with Shein and Temu about how to address the issue of knock-offs, which may pose safety risks, such as improper age labels or choking hazards. Spin Master, known for its “Ms. Rachel” doll, has reported concerns over counterfeit versions of its toys on these platforms, which have not undergone proper safety testing. Temu has acted quickly to remove these listings and added Spin Master to its monitoring system to prevent further issues.
While Shein and Temu’s toy market expansions are attracting attention, many manufacturers, like Fat Brain Toys, remain cautious. Mark Carson, the president of Fat Brain Toys, stated that he would closely monitor the situation before deciding whether to sell on these platforms, emphasizing that it would need to be a strategic fit for the company.
