Thanks for the update, interesting as usual. As for the last chart on churn: could the churn ratio simply be a function of new user addition rate? E.g., Temu is investing in user growth like crazy, getting lots of new users which means many will churn in the short term, while Shopee has moderate user growth rate, leading to low churn?
I don’t think that’s necessarily the case. In Temu’s situation, they have just entered the market, so all users are essentially new users. The high churn rate indicates that users are not sticking around, or they are only acquiring low-quality users. By contrast, American’s churn rate is even higher, which has nothing to do with new users, as they have been in the market for many years.
Thanks for the update, interesting as usual. As for the last chart on churn: could the churn ratio simply be a function of new user addition rate? E.g., Temu is investing in user growth like crazy, getting lots of new users which means many will churn in the short term, while Shopee has moderate user growth rate, leading to low churn?
I don’t think that’s necessarily the case. In Temu’s situation, they have just entered the market, so all users are essentially new users. The high churn rate indicates that users are not sticking around, or they are only acquiring low-quality users. By contrast, American’s churn rate is even higher, which has nothing to do with new users, as they have been in the market for many years.