Temu, a shopping app developed by PDD Holdings Inc., has become the most downloaded in the U.S. since its launch in August 2022. It offers a similar value proposition as AliExpress and Wish, with a focus on providing inexpensive goods that can be shipped within a week or less to Western consumers.
Temu’s rapid ascent to the top of the shopping app market has largely been fueled by advertising. It remains to be seen whether the app will be able to maintain its position in the coming years. The Chinese sister company, Pinduoduo, had 868 million active buyers in China in 2021 and processed $383 billion in gross merchandise volume.
As an e-commerce marketplace developed by PDD Holdings, a multinational commerce group, Temu was launched in the U.S. in late August 2022 and quickly gained widespread attention within three months. Temu’s popularity can largely be attributed to advertising but also to its strategy of offering free items to users who promote the app on their social networks and get their friends and family to sign up.
Data.ai shows that since its launch, it has become the No.1 app on the US App download list so far.
According to Sensor Tower, the United States is currently Temu’s largest market, accounting for 97% of the app’s 5.2 million global installations since its launch in August 2022. In addition to the U.S., Temu has also recently expanded to Africa, where it has reportedly performed well. As of March 22, Temu is available in the US, Canada, Australia and New Zealand.
Additionally, on April 25th Temu started being available in the following European countries: France, Germany, Italy, The Netherlands, Spain, and the United Kingdom.
Below you can see the global downloads of the Temu Shopping App from September 2022 to July 2023, measured in millions (source: Statista).
Pinduoduo, the sister company of Temu, has become a dominant force in the domestic e-commerce market in China, but it remains to be seen whether it can replicate this success abroad. Some believe that the concept of bringing Chinese supply chains to overseas markets could be successful, but there are also many skeptics who have doubts about the Temu platform, which is similar to other “low-cost” marketplaces such as Wish and AliExpress.
Which consumers does Temu attract? Here are initial findings: These are primarily price-savvy shoppers who are used to marketplaces (especially Amazon) and gamification (through TikTok use). They tend to be young people from Generation Z.
An initial 2023 U.S. study by Coresight Research on the relationship between U.S. consumers and Temu also found:
Temu employs customer reviews as a sales strategy, much like other marketplaces and platforms. However, it appears to make it challenging for customers to locate and read negative feedback. Generally, one would find very few such reviews available.
If you’ve ever tried submitting a review on Temu, you’ll notice that the platform seems engineered to only accumulate positive feedback, effectively discouraging negative comments.
While this approach may boost sales, it hampers a genuine evaluation of customer experiences with a product.
PDD Holdings has said that Temu will not blindly replicate what worked for its sister platform Pinduoduo in China in the markets it operates in, but would rather start from the needs of the customers. One of the reasons for Shein’s success, a Chinese online fast fashion retailer, is that it is focused on women’s apparel and lifestyle, whereas Amazon is at a disadvantage. In contrast, categories on Temu are not very much different from Amazon, AliExpress, or Wish.
Below you can find some of Temu’s challenges:
Reviewing the above positive and hesitant opinions on Temu, we have to admit that Temu is still at a very early stage in the global market. The success of low-cost players like AliExpress and Shein has made us aware of the global downgrading of consumption. Temu should continue to learn from the lessons of other similar marketplaces and improve its sustainability to avoid just becoming a flash in the European and US markets.
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