What is Temu and why is it interesting for your business?
Temu is a Chinese-based marketplace with a wide range of products at incredibly low prices that is rapidly expanding around the world. It is the global version of Pinduoduo, a well-known Chinese shopping site. What sets Temu apart are its extremely affordable prices, which are increasingly gaining popularity among users, and the particular aggressiveness of its marketing campaigns . To attract new customers, they offer discounts of up to 90% and even free products to those who refer friends and family to the platform.
Since the Super Bowl commercial aired, Temu has taken over the world at record speed, despite only launching in late 2022.
It has become the most downloaded app in both the United States and Canada. With nearly 1 billion monthly active users , it’s no wonder Amazon sellers have been intrigued by selling on the platform. And Amazon is starting to worry.
Temu is owned by PDD Holdings, the company that created the online shopping site Pinduoduo, a Chinese e-commerce giant with 750 million daily users: founded in 2015, it entered forcefully in a market until then dominated by the usual suspects such as Alibaba and JD. The platform offers the possibility for anyone to open their own store to sell products, it has a wide range of items in at least 29 main categories and 250 subcategories. This includes clothes, beauty products, shoes, electronics and even small appliances.
Temu’s success is due to its ability to eliminate the middleman between sellers and buyers , allowing sellers to ship directly to customers without having to use local warehouses. Temu has adopted an aggressive advertising strategy, promoting the ability to “ shop like a billionaire ” and leveraging global events and social media like TikTok, Instagram and Facebook to increase visibility.
Similar to TikTok and Shein, Temu aims to conquer the international market to avoid strong domestic competition in China. The platform has recorded huge revenues and achieved considerable success in the United States, Australia and Germany, attracting more and more attention in the West, both politically and economically, for the opportunities it offers to businesses.
You just have to know how to read the numbers. Temu has been ahead of its revenue estimates for the past few weeks , posting 52.3 billion yuan ($7.2 billion) in revenue in the second quarter, beating the average estimate of 43.3 billion yuan. Net profit rose 47% to 13.1 billion yuan. After launching in the United States in September 2022, it expanded to Europe in April, arriving in France, Germany, Ireland, the Netherlands, Spain, the United Kingdom, and Italy. And more and more companies have begun to see Temu as an opportunity to exploit.
Selling your products on Temu: advantages and disadvantages for sellers and customers
What is striking are obviously the prices, but as time goes by, more and more advantages and disadvantages of this e-commerce are revealed that are worth considering if you are thinking of using it to sell your products. Let's do a brief summary.
Advantages
