Euro Fast Fashion Hit by Macro and Chinese E-Commerce

Key Takeaways:

• Both the geopolitical and macro environments remain uncertain and under pressure. From Jun’22 to Jul’23 Euro Area monthly retail sales fell an average of 2% YoY, per EuroStat. The worst performer was the UK, down nearly 5% YoY on average over the same period, while Germany and France saw average declines of 4% and 3.5%, respectively

  • Geographic MAU trends from Sensor Tower’s Western European retail cohort highlight the drag from Germany, France and the UK, as a decrease in MAU growth is suggestive of a pullback in shopping, though this has been partially offset by growth in Chinese e-commerce retailers Shein and Temu in the region

• European fashion brands have taken a substantial hit in the last couple of years, as both downloads and MAUs have faltered, while Chinese e-commerce retailers have seen a spike in performance

  • Per ST data, downloads and MAUs ex-Shein and Temu fell 5% YoY and 15% YoY, respectively, in 3Q23 for ST’s W. European cohort, with weakness across Euro brands, particularly ASOS, boohoo and Net-A-Porter, likely due to their larger exposure to the UK market

• Shein and Temu are gaining MAU market share among the W. European retail cohort, with YTD 2023 market share of 44% and 19%, respectively

• Much of Shein’s and Temu’s outsized growth has been driven by higher advertising spend across EMEA; Shein’s advertising spend grew 230% YoY across the UK, Germany, France, Italy, and Spain in 1H23

  • Though just a year since its launch in the US, Temu has already expanded into Europe and now averages 20% of the spend across the cohort in France, Spain, Italy, Germany, and the UK. Temu is the largest advertiser in the UK with 35% of spend

For more information, request the full report from reports@sensortower.com.