The costs appear nearly too good to be true: Lenovo wi-fi earbuds for $3.70, an eyebrow pencil for 59 cents, two out of doors photo voltaic lamps for $6.39—all delivered at no cost. Welcome to Temu, which brings the rock-bottom costs and frenetic vitality of Chinese language ecommerce to US customers.
Temu’s web site and cellular app launched on September 1, the primary US storefront from Chinese language ecommerce big Pinduoduo. Amazon, eBay, and different Western on-line shops function loads of items from Chinese language suppliers. Temu’s discount costs are an experiment in slicing out the intermediary, by permitting Chinese language distributors to promote their merchandise on to US shoppers, and delivery instantly from China moderately than constructing out a community of US warehouses.
Temu appears to marry the “the whole lot retailer” number of Amazon with the low costs and social components which have made fast-fashion juggernaut Shein so profitable. Temu, like Shein, options intensive evaluations and consumer images on its product pages, and it promotes collaborations with influencers. To this point, the technique appears to be working. On October 24, lower than eight weeks after it launched, Temu was ranked at 39 on the listing of most downloaded free iPhone apps within the US, and fifth amongst free purchasing apps, behind solely Amazon, Shein, Walmart, and Nike.
Courtesy of Temu
Temu seemed desolate when it first launched, nevertheless it now provides 1000’s of recent merchandise every day, the corporate claims. Rui Ma, an investor and analyst who based Tech Buzz China, a podcast and investor neighborhood, says the shop has advanced at “China speed”—the form of fast-iteration and progress Chinese language corporations are identified for, and that US corporations can battle to maintain up with. “I feel it is providing a fairly good buyer expertise,” she says. “I’ve ordered from there 3 times already.” Her haul contains home items, and people dazzlingly low-cost Lenovo headphones, that are amongst Temu’s high sellers.
Temu could also be artificially tempting proper now. It affords free delivery with no minimal buy and widespread 30 p.c reductions, however Pinduoduo may very well be subsidizing early prospects in a bid to realize phrase of mouth. “The query for buyers could be, how worthwhile is that this?” Ma says.
Pinduoduo, one of many largest on-line purchasing websites in China, can afford to spend money on a swing for US prospects. The corporate, which didn’t reply to interview requests, listed on the Nasdaq inventory change in 2018 and reported practically $15 billion in income in 2021. In China, Pinduoduo permits corporations—together with farmers—to promote on to shoppers by way of a well-liked cellular app very totally different from these supplied by US retailers. It contains gaming and social elements, akin to purchasing by way of livestream. A preferred group shopping for function lets buddies band collectively to get a product for an ultra-low value. However the firm’s success in China is constructed on a logistics community of warehouses and supply companions.
Profitable the loyalty of US customers who’ve many different, extra acquainted choices can be one in every of Temu’s biggest challenges, says retail advertising and marketing advisor Cathy Hotka. Its low costs look like successful converts, however additionally they include a threat of blowback over poor high quality and inaccurate sizing, she says.