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JENS BERGERMANN

With an estimated 800 million Swiss francs in revenue for Temu alone in 2024, one thing is abundantly clear: The purchasing power of Swiss consumers is flowing in considerable amounts to international, especially Chinese, e-commerce platforms. This development presents immense challenges for established Swiss retailers and brands looking to enter the Swiss market. Passivity is not an option. What counts now are well-thought-out strategies for differentiation, strengthening one's own position, and securing long-term competitiveness.

Why is This Topic Relevant?

The e-commerce landscape is constantly changing, but the advance of aggressive players like Temu, Shein, and AliExpress marks a new level of escalation. These platforms are not only changing market shares but also sustainably altering consumer shopping behavior.

• Market Shift due to Aggressive Players: The sheer market power and marketing budget of these global giants are leading to a significant shift. Local providers are increasingly fighting for visibility and market share.

• Consumer Behavior is Shifting Rapidly: Attracted by extremely low prices, a seemingly endless product selection, and aggressive advertising campaigns, more and more shoppers are turning to these Asian platforms. Expectations regarding prices and product availability are changing.

• Local Providers are Losing Visibility and Margin: The price war ignited by these platforms is putting massive pressure on the margins of local retailers. At the same time, it is becoming more difficult to compete against the marketing power of the giants in search results and on advertising platforms.

When Does the Competition Become a Problem?

The presence of international competitors is nothing new in itself. However, the current development becomes problematic due to its scale and specific mechanisms:

• Revenue Shift to Non-European Platforms: A significant portion of consumer spending flows directly abroad, bypassing the local value chain. This has implications for jobs, tax revenues, and the entire Swiss retail landscape.

• Consumers Expect Prices and Services that Local Providers Can Hardly Meet: The low-price strategy, often made possible by different production and regulatory standards, creates an expectation that local retailers can hardly meet. The pressure arises less from service expectations like free shipping – this was established in the market years ago by players like Zalando and is now standard. The real challenge for Swiss retailers is to withstand the pure price pressure without jeopardizing their own livelihood through shrinking margins.

What's Behind the Success of the Chinese Platforms?

The success of Temu, Shein, and others is based on a combination of several factors that need to be understood:

• Customs Advantages Through Circumvention of Regulations: Theoretically, customs and VAT should apply to imports. In practice, however, shipments are often declared with too low a value to meet customs exemption limits or minimize duties. The sheer volume of packages currently makes complete inspection by customs impossible.

• Professional Appearance Despite Quality Gaps: The platforms present themselves as modern and user-friendly. However, the underlying quality and safety standards of the products often do not meet European or Swiss norms. This is accepted by many consumers because of the price, but it carries significant risks, especially with certain product groups.
  
  “We see textiles, which often have a strong chemical smell, and children's toys, which are subject to strict rules in the EU that are not followed here, as particularly critical. Caution is also advised with electronic items: A CE mark is quickly printed on, but it doesn't guarantee conformity. The same applies to cosmetics or dietary supplements, where trust and tested ingredients are crucial.” - Jens Bergermann (Founder of SURS)
   

• Speed and Assortment Depth as Differentiating Features: The ability to pick up on trends extremely quickly and offer a huge, constantly changing assortment primarily appeals to younger, price-sensitive target groups. The logistics chains are trimmed for maximum efficiency and speed from the production site to the consumer.

Political & Economic Rules of the Game

The unequal competitive conditions are not without political reactions. There are increasing efforts to establish fairer rules of the game:

• Example USA: Customs Shift and Price Adjustments: In the U.S., there are already political initiatives to reconsider or abolish customs exemption limits for direct imports from China, which could lead to noticeable price adjustments. Similar discussions are also being held in Europe.

• Demands on Politics: Fairness in Customs, VAT, Product Safety: Business associations and companies are increasingly calling on politicians to ensure a level playing field. This concerns the consistent collection of customs duties and VAT, but also compliance with product safety standards and consumer protection rights.

What Local Retailers Need to Do Now

In light of these developments, Swiss retailers and brands who want to succeed here must take action and adapt their strategies:

• Expand Warehousing and Logistics in Switzerland: Local warehousing enables fast delivery times within Switzerland (1-2 business days) and reliable processing. This is a clear advantage over long delivery times from Asia and builds trust with customers.

• Differentiate Assortment Through Quality: Instead of entering a pure price war, retailers must focus on quality, uniqueness, and reliability. The crucial difference is not in niche products – Chinese manufacturers can produce almost anything – but in the process. A reputable retailer invests in quality control, checks samples, and knows their manufacturers. This ensures that the customer receives flawless goods.
  
  “Someone who orders ten items from Temu might get three good ones, two mediocre ones, and five unusable ones. The hit rate is low. A European or Swiss retailer who has their processes under control aims for a hit rate of ten out of ten. This quality standard and the associated reliability are the strongest lever for differentiation.” - Jens Bergermann (Founder of SURS)

• Use Service & Customer Communication as a USP: Personal advice, first-class customer service in the local language, uncomplicated returns processing, and warranty services are crucial differentiating features. Here, local providers can play to their proximity to the customer.

The Special Case: Collaborating with Temu?

A collaboration with platforms like Temu to leverage their reach should be critically evaluated by reputable Swiss retailers and is hardly recommended:

• Business Opportunity vs. Reputational Risk: Being listed on platforms often associated with inferior quality can damage one's own brand image.

• Price Pressure and Lack of Control: Temu exerts massive price pressure on its retailers to guarantee the lowest prices. Moreover, the correct handling of customs and VAT is a major challenge, as many sellers on the platform try to circumvent costs through false declarations. Entering such an environment carries significant compliance risks.

Risks & Typical Mistakes

In dealing with the new market dynamics, there are several pitfalls to avoid:

• Passivity in the Market Environment: The hope that the problem will solve itself or that one's own customer base will remain loyal without taking active measures is deceptive.

• Price Dumping Without a Quality Promise: Trying to match the prices of Chinese platforms without a clear differentiation strategy in quality or service usually leads to a downward spiral.

• Ignorance of Regulatory Requirements: Anyone who imports and sells products in Switzerland must know and comply with the local laws and regulations – an area where SURS provides comprehensive support.

Conclusion – How Should Swiss Retailers Best React?

The Chinese competition from platforms like Temu, Shein, and AliExpress is a reality that is permanently changing the Swiss e-commerce market. Instead of being paralyzed by shock, retailers and brands should see this as a wake-up call to proactively adapt their strategies.

• Invest, Differentiate & Localize Now: Investments in a local presence (warehouse, service), a clearly differentiated, high-quality, and compliant assortment, as well as a customer approach tailored to the Swiss market are crucial.

• Consider Collaborating with a Sales Partner for Switzerland: An experienced partner like SURS can significantly facilitate market entry or the optimization of distribution in Switzerland, from logistics and marketplace integration to compliance with all regulatory requirements.

• Actively Use Industry Knowledge: Stay continuously informed about market developments. For example, Jens Bergermann regularly publishes articles on the topic on LinkedIn that offer valuable insights. The linked NZZ article "Temu in Switzerland with 800 million in revenue - SECO reacts" also provides important background information on the current market situation.

Use the current challenges as an opportunity to future-proof your business model and successfully position yourself in the Swiss market.

FAQs on the Topic

How high is Temu's revenue share in Switzerland?

Exact official figures are hard to come by, but estimates, like the 800 million CHF for 2024 mentioned in the NZZ article, indicate an already significant and rapidly growing market share.

Why do consumers prefer these platforms?

The main reasons are often the extremely low prices, the huge product selection, and aggressive marketing campaigns. Convenience and the discovery aspect also play a role.

Is collaborating with Temu realistic?

For most Swiss retailers and brands, this is likely unrealistic and not recommended due to reputational risks, price pressure, and compliance challenges.

Which product categories are particularly affected?

The entire fashion and textile sector, as well as accessories for electronics (e.g., phone cases, charging cables) and small items from the Home & Living category, are under particular pressure. Product groups where trust and touch play a major role, such as cosmetics, mattresses, or large furniture, are currently better protected, as customer expectations for quality and service are higher here.

What role does politics play in regulation?

Politics faces the challenge of creating a level playing field (e.g., in customs and VAT) while ensuring consumer protection (product safety, data protection) without unduly hindering international trade. Discussions on this are ongoing at the national and international levels.

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