Goodbye Shein, Hello Temu. US shoppers are reportedly spending 20% more at the Chinese dollar store than at the hot fast-fashion retailer.

• Spending on bargain Chinese shopping app Temu surpassed Shein in May, according to Bloomberg data.
• Temu has been the most downloaded iOS app on most days of 2023, Bloomberg reported.
• Consumer spending on Chinese apps is still only a fraction of spending on Amazon.

Chinese e-commerce giants Shein and Temu are going head-to-head in a race to become America's most-beloved online shopping destination.

If you haven't heard of Temu yet, it's an ultra cheap marketplace where you can buy a pair of glasses for less than $2. When Temu launched in the US last September, it set what seemed like an ambitious sales goal: surpass fast-fashion giant Shein in total merchandise value within a year, Bloomberg previously reported.

But it looks like the Chinese-owned marketplace is already on track to hit that goal ahead of schedule. Just in May, US spending on Temu was 20% higher than on Shein, Bloomberg reported on Wednesday. Temu has also become the most downloaded app on Apple's iOS app store in 2023 (on most days), Bloomberg reported based on data from Apptopia, an app-intelligence firm.

The "most downloaded" title once belonged to Shein, which has evolved into a fast-fashion behemoth since it launched in 2008. The brand's success is due in part to aggressive social-media marketing tactics, like the hashtag #Sheinhauls on TikTok, which have helped it capture scores of Gen Z shoppers.

It's worth noting, though, that since Temu is a marketplace, only a portion of consumer spending on the app materializes into real revenue for the company. Shein, meanwhile, produces all its own products, which means it earns more revenue per dollar spent by customers.

And while Temu's recent jockeying to overtake Shein is notable, consumer spending on the platforms and other Chinese apps still pales in comparison to spending on Amazon. According to data from Bloomberg Second Measure, which analyzes credit and debit transactions data, spending on Shein and Temu is still just a fraction of Amazon.

Both companies, which have been compared to TikTok, are also facing increased scrutiny from US legislators and activist groups. An April report by the US-China Economic and Security Review Commission raised concerns about Chinese e-commerce companies, citing reports that Shein has produced clothing with high levels of lead and used manufacturers that violated labor laws. US lawmakers proposed that Shein delay its plans to go public until it could confirm that it does not use forced labor. In an email to Supply Chain Dive, a Shein spokesperson said the company has "zero tolerance for forced labor" and its suppliers adhere to a strict code of conduct.

The USCC also cited reports that Temu's parent company Pinduoduo required its workers to clock "extreme overtime" hours and that cybersecurity teams found malware on Pinduoduo's Android app.

Temu and Shein did not immediately respond to Insider's request for a comment.