From 2018 to 2023, US third-party (3P) marketplace sales outpaced overall e-commerce sales growth, driven by evolving consumer behaviour, rising living costs, and the emergence of new players, particularly China-affiliated platforms like Shein, Temu, and TikTok Shop. These platforms have made significant inroads into the US market, each excelling in different categories: Temu in electronics, Shein in apparel, and TikTok Shop in beauty. Initially finding success due to their commitment to affordability, these players are now expanding their offerings and reshaping market dynamics.
Amazon maintains its dominance, yet faces growing competition from emerging platforms
From 2018 to 2023, the US 3P marketplace sector experienced substantial growth, with sales rising by 152% in current terms to reach USD324 billion, outpacing broader US marketplace sales growth of 125% and the US retail e-commerce sector’s growth of 107%.
Amazon, the dominant force in the US 3P marketplace space, saw its share of sales grow from 42% in 2014 to a peak of 74% in 2022. However, rising competition from emerging marketplaces offering affordable products led to a slight dip in its share to 73% in 2023.
Emerging platforms Temu and TikTok Shop have advanced rapidly to account for a combined 3% share of this market in 2023, despite neither being present in the US as recently as 2022
Source: Euromonitor International Passport: Retail, 2024 edition
Additionally, driven primarily by apparel and footwear, Shein’s e-commerce sales in the US reached USD8.7 billion in 2023 (excluding sales tax), more than 12 times its 2019 sales. While still niche, Shein’s 3P marketplace, launched in June 2023, adds further competitive pressure on Amazon.
Emerging players showcase unique strengths across categories
As the dominant player in the US e-commerce sector, Amazon leads in online sales across many product categories.
Amazon ranks as the top retailer in six of the 12 tracked categories, such as beauty and personal care and consumer health
Source: Euromonitor International’s E-commerce system
Meanwhile, Shein has established a strong presence in the US apparel and footwear market, ranking as the fourth largest brand with a 2% share in 2024, with over 80% of its total e-commerce sales coming from these categories. Even as Shein has launched its 3P marketplace, apparel and footwear remain central to its operations, and the majority of its sales across these categories are sourced from its own product inventory rather than 3P sellers. As of 2024, 74% of Shein’s SKUs are sold by 3P sellers, with only 36% of its apparel and footwear SKUs from 3P sellers.
Apparel and footwear represent a smaller portion of Temu’s sales, accounting for around 30% of its sales by value. As of December 2024, only 15-20% of Temu’s best sellers are in these categories, with items like slippers and loungewear primarily purchased for everyday use rather than fashion. Meanwhile, Temu offers a broader product range, with electronics leading at 8% of sales.
Launched in September 2023, TikTok Shop (TTS) is new to the US market but already benefits from a massive user base, with the TikTok app reaching 696 million downloads in the US by December 2024. TTS offers products in 11 categories, with beauty and personal care being the most important, accounting for 6% of TTS sales by value in 2024. TikTok is increasingly shaping trends in this space, particularly with "dupe" products, which have gained popularity as consumers seek affordable alternatives to premium beauty items.
The rapid growth of Temu, Shein, and TTS can be largely attributed to their competitive pricing. In 2024, Shein’s average unit price is about USD8 and Temu’s is USD14 – typically significantly lower than similar products on Amazon. For example, one of Temu’s best sellers, an electric foot massager, is priced at around USD23, while a similar product typically retails for about USD35 on Amazon. A major driver of these low prices is the platforms’ lower commission fees.
Amazon’s commission on its 3P marketplace sales typically ranges around 15% of the sale price, depending on the category. In contrast, Shein and TTS offer 3P sellers commission-free sales for the first three months, after which they begin taking a cut. TTS’s commission was about 8% in 2024, while Shein’s ranged from 8% to 12%. Temu, which initially had no commission, introduced it in late 2023, ranging from 5% to 15%.
Another key advantage driving lower prices on these emerging platforms is their fully and semi-managed models. Unlike Amazon’s Fulfilled by Merchant and Fulfilled by Amazon models, the upstart platforms implement a price evaluation system, giving them greater control over pricing.
In response to the lower prices of emerging players, Amazon launched Amazon Haul in November 2024. This new offering targets US customers with affordable fashion, home goods, electronics, and more – all priced under USD20, with delivery times of 1-2 weeks and free shipping on orders over USD25.
Looking ahead, China-affiliated 3P marketplaces are set to continue the pricing war in the short to medium term. Local giants are also entering the competition, increasing pressure on mid-priced brands across various categories. As these platforms continue to localise, the competition for faster shipping will intensify. As price and shipping wars escalate, consumers will increasingly benefit from the convenience and grow accustomed to it. However, this could lead to profit challenges for the platforms and raise questions about the sustainability of their business model. Additionally, labour issues are likely to worsen, potentially drawing the attention of governments or associations and creating further complications.
Learn more about the emerging third-party marketplace players in our report, New Players, New Rules: Temu, Shein and TikTok Shop in US E-Commerce, to stay ahead of the competition and secure your position in e-commerce.