The costs appear nearly too good to be true: Lenovo wireless earbuds for $3.70, an eyebrow pencil for 59 cents, two out of doors solar lamps for $6.39—all delivered totally free. Welcome to Temu, which brings the rock-bottom costs and frenetic vitality of Chinese language ecommerce to US buyers.
Temu’s web site and cellular app launched on September 1, the primary US storefront from Chinese language ecommerce large 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 chopping out the intermediary, by permitting Chinese language distributors to promote their merchandise on to US customers, and transport straight from China moderately than constructing out a community of US warehouses.
Temu appears to marry the “all the pieces retailer” choice 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. Up to now, 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 procuring apps, behind solely Amazon, Shein, Walmart, and Nike.
Courtesy of Temu
Temu regarded desolate when it first launched, but it surely now provides thousands of new products 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 type of fast-iteration and development Chinese language firms are identified for, and that US firms 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 consists of home items, and people dazzlingly low-cost Lenovo headphones, that are amongst Temu’s top sellers.
Temu could also be artificially tempting proper now. It presents free transport with no minimal buy and widespread 30 % reductions, however Pinduoduo might be subsidizing early prospects in a bid to achieve phrase of mouth. “The query for buyers can be, how worthwhile is that this?” Ma says.
Pinduoduo, one of many greatest on-line procuring websites in China, can afford to put money into a swing for US prospects. The corporate, which didn’t reply to interview requests, listed on the Nasdaq inventory trade in 2018 and reported nearly $15 billion in income in 2021. In China, Pinduoduo permits firms—together with farmers—to promote on to customers by a well-liked cellular app very totally different from these provided by US retailers. It consists of gaming and social parts, similar to procuring via livestream. A preferred group shopping for function lets buddies band collectively to get a product for an ultra-low worth. However the firm’s success in China is constructed on a logistics network of warehouses and supply companions.
Successful the loyalty of US buyers who’ve many different, extra acquainted choices might be one in every of Temu’s best challenges, says retail advertising and marketing marketing consultant Cathy Hotka. Its low costs look like profitable converts, however in addition they include a threat of blowback over poor high quality and inaccurate sizing, she says.
