Share price plummeted 82%! Wayfair may be acquired by Shein or Temu!

It is learned that recently, The Information mentioned in its latest 2024 annual forecast report that Chinese fast fashion giant Shein or its competitor Pinduoduo's cross-border e-commerce platform Temu may become potential acquirers of US home furnishing giant Wayfair.

The report said that this speculation is based on the fact that Wayfair has been facing the dilemma of losing active customers and a 82% drop in its stock price in the past three years. For Shein or Temu, a merger with Wayfair will help them get rid of their reputation as "cheap e-commerce" so that they can better compete with Amazon and penetrate the US market.

The report also states that for Shein, a merger with Wayfair would give it access to Wayfair's warehouses and fulfillment centers and facilitate Shein to streamline its distribution efforts in the United States.

Of the two companies, Temu's parent company, Pinduoduo, has the deeper pockets to afford the acquisition. Currently, Pinduoduo's market value is about $191 billion, while Shein's market value is about $66 billion.

It is understood that after the epidemic, the demand in the furniture industry in the United States has dropped significantly. In January 2023, Wayfair laid off about 1,750 employees worldwide, accounting for more than 10% of its total employees. The company said at the time that the move was to reduce management levels and increase the company's agility.

The layoffs are also part of Wayfair's efforts to reduce costs by $500 million and achieve growth plans after the company suffered a decline in revenue, active customers and orders in November 2022.

Wayfair has taken a series of cost-cutting measures to restore profitability amid slowing demand, including improving wholesale revenue, improving logistics efficiency, increasing merchandise sales revenue and improving premium supplier services over the past year.

At the time, the company was taking steps to improve wholesale economics, logistics efficiencies, merchandise gains and offer more high-mix supplier services.

The potential merger comes as Shein and Temu continue to step up their global expansion. In June, Shein said it planned to strengthen its market presence in Europe and Mexico while expanding its supply of locally manufactured products. In the same month, Shein expanded its third-party marketplace to include home appliances and smart home products.

Temu was launched in the United States in September 2022, mainly selling clothing, pet supplies, home and garden products. Temu successfully won the favor of American consumers with its ultra-low prices. Less than two months after its launch, Temu quickly topped the US free app download list and has remained in the top three since then.

At present, the specific details of the merger negotiations have not been disclosed, but the industry is generally concerned about whether this potential merger can change Wayfair's fate in the e-commerce field and whether Shein and Temu can make greater breakthroughs in the global market.

Editor ✎ Nicole/

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