Temu and European sellers: between promises and disappointments

Some European brands do indeed find their footing on the platform. Casabel, specialized in French home linens, for example saw its local sales increase by around 15% after joining Temu, before expanding its distribution to other European countries through the platform: Spain, Germany, Belgium, the Netherlands, Italy. The secret? Standard products that are easy to stock, with volumes and cost structures suited to discount pricing.

A similar story can be found with OneGum, which sells energy snacks. The brand used Temu to quickly launch its store, benefit from marketing support, and expand its customer base beyond France. In this specific case, the low average basket, the lightweight product to ship, and a “fun” brand image fit perfectly with the platform’s world of playful shopping and constant promotions.

These successes are no coincidence. They share several characteristics: high initial margins allowing aggressive discounts and promotions, products that can support large volumes with simple packaging, and controlled logistics costs. For these players, Temu acts as a lever with a low barrier to entry, massive traffic, and a “local-to-local” model that is beginning to reduce delivery times thanks to warehouses and logistics partners in Europe, notably DHL.

But not all European sellers manage to stand out. Adrian Chua, founder of TradeDownCo in the UK, threw in the towel after six months and returned to Amazon. His unfiltered testimony reveals the system’s flaws: extreme price pressure with imposed discounts and a very low “optimal” price, margins wiped out once discounts and Temu’s commission are deducted, shipping and return costs that local sellers struggle to absorb at the same level as Chinese sellers, and heavy operational management with demanding compliance requirements, order tracking, and time-consuming customer service.

Other European sellers report similar difficulties. A German SME positioned on more premium products explains that Temu suggested a price around €12 for an item normally sold for €20 on its usual channels, with additional expectations for promotions. The result: very few sales and a business model that turns red as soon as discounts and local logistics are factored in.

Beyond financial aspects, the inability to build a brand weighs heavily. The site is perceived as a bargain-basement “bazaar,” incompatible with any move upmarket. Added to this are regulatory and reputational risks, with European Commission investigations into product safety and compliance, as well as a sometimes negative image among consumers sensitive to issues surrounding fast fashion or ultra-discount retail.

The analysis of these experiences makes it possible to distinguish three main profiles:

• The likely winners offer low- to mid-priced products with high gross margins, simple logistics, and belong to categories that are highly price-sensitive such as home goods, gadgets, snacks, or accessories. Above all, they accept Temu as a channel for volume and promotions, not as a brand-building foundation. Casabel, OneGum, and certain homeware or decor brands illustrate this.
• The opportunistic players use the platform to clear overstocks, test entry-level ranges, or generate cash from dormant SKUs. They accept low or even occasionally neutral profitability in exchange for visibility.
• The likely losers are positioned in premium or high-quality segments, with high European production costs and an average basket above €20–30. Their need to build a brand, tell a story, and maintain prices consistent with quality and manufacturing directly collides with Temu’s formula. The example of Adrian Chua or German and French SMEs ending up with near-zero margins and a diluted brand image illustrates this.

Two years after celebrating its establishment in Europe, Temu continues to showcase its ambition to support local merchants. But the reality on the ground reveals that the ultra-discount model suits (for now) only a very specific type of seller.

For any European seller, the question ultimately comes down to a simple equation: if your product is similar to Casabel or OneGum in terms of price, volume, and logistics, Temu can be a powerful lever. If you are closer to the Adrian Chua case — with a brand-driven approach, quality requirements, and a medium-to-high price point — disappointment is likely.

In this second case, it is better to consider Temu as a short-term testing channel rather than a development pillar, and to turn to more “classic” marketplaces like Amazon or Cdiscount, where pricing freedom and brand building are better rewarded.