5 hours Ago By Varun Godinho
It’s been a tumultuous few months for the e-commerce retail sector in Australia with Wesfarmers shutting down Catch, Kogan confirming that its offer to acquire Catch was refused, and ultra-low-cost retailers such as Shein and Temu facing calls for them to be investigated. Temu and Shein which predominantly ship cheap Chinese goods, now risk losing shoppers in 2025, according to new research from e-commerce and marketplace accelerator Pattern. In its ‘2025 Marketplace Consumer Report’, Pattern found that although Shein and Temu have rapidly captured market share, only 12% of consumers trust Temu for its product quality, leading to a predicted 7% drop in shoppers.
Only 43% of shoppers would consider buying from Temu in 2025. Shein faces similar challenges, with trust levels at just 11%. “Many Australians trialled Temu and Shein over the last 18 months due to aggressive pricing and large marketing campaigns.
Yet early adopters have found these marketplaces unreliable,” said Merline McGregor, managing director for Pattern Australia. “Although they may still expand in the future, Temu and Shein face a significant challenge in legitimising themselves within the Australian market and delivering on the customer experience.” Last month, Harvey Norman’s executive chair, Gerry Harvey, called for a government inquiry into Shein and Temu, claiming that they don’t pay tax in Australia, although they are collectively raking in billions in annual sales.
“There should be a government inquiry into it as to what ramifications are there and whether they should or shouldn’t do something about it,” said Harvey. Pattern found that 94% of Australians are purchasing from at least one online marketplace in the past 12 months. It found that Amazon was the country’s leading marketplace and attracted 1.
1 million new Australian users in 2024, bringing its total to 7.9 million shoppers, accounting for 10% of the country’s total online shopping spend. It found that 63% of Australians plan to shop on Amazon in 2025.
Its appeal is particularly strong among younger shoppers (71% of those aged 18-24) and high-income households earning over $200,000 annually (78%). “While Chinese platforms have disrupted the market, Amazon’s trusted reputation and ability to adapt — such as the launch of its low-cost ‘Haul’ storefront — ensures it stays ahead,” noted McGregor. The research firm noted that Australian shoppers were also evolving in how they typically research and discover new products online, with traditional search giant, Google, experiencing a 7% decline in people using the platform for new product discovery.
The share of consumers who begin their product research on Amazon has risen by 27% year-on-year. In 2024, 63% of shoppers bought a product that they had never purchased from Amazon before and 38% visited a brand’s website after discovering it on the platform. “Online marketplaces play a pivotal role in how shoppers discover and evaluate new products,” said McGregor.
“Their extensive variety, combined with transparent customer feedback empowers consumers to explore unfamiliar brands with greater confidence.”.
