Temu is an online store that sells budget-friendly products, often also called Shein’s rival low-cost e-commerce app. Temu is owned by Pinduoduo, a prominent Chinese e-commerce giant, and in 2022 it made its debut in the US, Australia and New Zealand.
The success is evident from its wide spread, but what’s behind Temu’s sudden popularity?
What Can You Find on Temu?
Other than selling almost everything, they facilitate connections between consumers and sellers, manufacturers, and brands globally, aiming to enhance people’s lives.
Although the idea that acquiring material possessions leads to a fulfilling life is debatable, the platform undeniably offers an extensive array of products, ranging from wedding dresses and drill bits to toothbrushes and various other items.
Additionally, they offer branded products, including a selection of technology items verified to be directly from the Chinese hardware manufacturer Lenovo.
Behind Temu’s Sudden Popularity: Temu vs Shein
The Temu and Shein rivalry, and the latter’s decision for Shein to shift his focus to South America, are thought to be partly the reason for Temu’s sudden popularity.
While Shein expands its operations from North America to South America, Temu is making a significant push for growth in the US market. Temu offers more competitive prices compared to Amazon and other US platforms, and it has even surpassed Shein in terms of sales. According to Bloomberg Second Measure, Temu’s sales in the US exceeded Shein’s by 20% in May of this year.
Is Temu different from other Chinese Companies?
Temu is not so different from Shein and other similar Chinese companies, like Wish and AliExpress. All these four companies share relatively similar business models characterized by rapid delivery, extensive supplier networks, and an absence of physical stores.
These platforms predominantly feature products sold by individual vendors who list their items, while the companies themselves primarily provide the software and the online marketplace. Interestingly, some products offered by Temu and Shein are identical, indicating potential collaboration with shared manufacturers, although the specifics remain unclear due to limited transparency.
Decoding Temu’s Sudden Popularity
The success of Temu can be attributed to its direct manufacturer-to-consumer model, allowing the company to operate on a large scale while maintaining low prices by eliminating middlemen. However, the lack of detailed information about the manufacturing process raises questions about the production costs. A similar aspect to Shein is that Temu shares trending product information with suppliers, enabling swift production increases in response to viral trends, such as those on TikTok.
Surely, the primary factor behind this surge in popularity is its substantial advertising budget. Temu has aggressively utilized Google Ads and targeted social media platforms, collaborating with influencers who receive compensation for shopping on Temu and promoting it through affiliate links.
Additionally, the company made a bold move by airing a Super Bowl advertisement in February, a venture that typically costs a minimum of USD $7 million for a 30-second slot, featuring the tagline “shop like a billionaire.”
A pivotal element contributing to Temu’s growing appeal is the social and gamified experience offered by its mobile app. For instance, the app incorporates interactive features like the “feed your fish” game, where users can win items such as plush sharks or store credit by tending to their virtual fish. To acquire fish food, users are encouraged to refer friends to use the app, enhancing its social aspect. This interactive and entertaining app experience allows Temu to deepen its understanding of its users, enabling personalized algorithmic recommendations tailored to each individual user.
Key Points of Temu’s Success
In conclusion, Temu’s rapid rise in the e-commerce industry can be attributed to its strategic marketing tactics, diverse product range, and innovative mobile app experience. Aggressive advertising, including a high-profile Super Bowl commercial and collaborations with influencers, has bolstered its visibility. The direct manufacturer-to-consumer model, coupled with competitive pricing and efficient supply chains, has positioned Temu as a strong contender in the US market, outperforming competitors like Shein.
While sharing similarities with other Chinese e-commerce platforms, Temu’s ability to leverage trends, engage influencers, and provide personalized shopping experiences distinguishes it from the competition.
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