In the constantly changing world of online shopping, Temu is one of the companies that has made a big impact. The Chinese e-commerce giant is taking the global stage, changing the way people shop and challenging established players in the market. Let’s take a look at how Temu has grown from a small start-up to a global e-commerce leader.
The beginning of a game changer
Temu was established in the United States in September 2022. The platform is owned by PDD Holdings, the parent company of China’s popular online marketplace, Pinduoduo. From the beginning, Temu’s goal was clear, to enable customers to « shop like billionaire » by offering a variety of products at very affordable prices. Temu’s unique approach to business sets him apart. By connecting Chinese suppliers directly with international customers, Temu eliminated middlemen, reducing costs and offering products at prices that seemed almost too good to be true. This approach quickly attracted price-conscious shoppers.
Fast growth and global reach
Temu’s growth has been remarkable. After launching in the U.S., the company rapidly expanded its operations. By March 2023, it was already active in Australia and New Zealand, quickly followed by entry into several European countries. By January 2024, Temu was operating in 49 countries worldwide. The company’s success is reflected in its numbers. In December 2023, Temu became the second most-visited e-commerce site in the world, after Amazon. By early 2024, it was attracting nearly 152 million monthly visitors in the U.S. alone, with a total of over 500 million monthly visitors globally. Its gross merchandise volume, which represents the total value of goods sold through the platform, saw an extraordinary rise from $290 million in 2022 to an estimated $21.6 billion in just the first half of 2024.
A key factor in Temu’s success is its marketing strategy. The company invests heavily in advertising, with an advertising budget set to reach $1.7 billion by 2023. The most notable is its 2023 and 2024 Super Bowl advertising campaign, which landed several spots at the event. In addition to traditional advertising, Temu also makes extensive use of social media, especially platforms like TikTok and YouTube. By partnering with influencers, Temu connects with a young audience and builds confidence through the right mindset. This strategy helped the company quickly grow its customer base.
Challenges and controversies
Despite its success, Temu has faced many problems. People are concerned about the quality of its products and whether its very low prices can last. Its pricing strategy has caused issues for local businesses, leading to bans in countries like Indonesia. There are also worries about data privacy and ethical problems, such as claims of forced labor in its supply chain. The company has also faced legal battles with competitors like Shein, and European authorities are investigating its pricing practices.
Between January and August 2024, Temu saw a 25% drop in visitors, suggesting its growth might be slowing. Its fast expansion has caused delivery delays and unhappy customers. Accusations of selling fake products have hurt its reputation. Also environmental groups have also criticized Temu for selling large amounts of cheap, disposable items that harm the planet.
Current status and future plans
By the end of 2024, Temu is remaining a major player in world e-commerce. To improve reliability and ensure growth, the company has strengthened quality controls, partnered with reliable suppliers, and made its supply chain more transparent. These efforts are designed to address concerns about product quality and ethical practices.
Temu is also working to reduce its reliance on the U.S. by growing in new markets like Southeast Asia, South America, and Europe. It is using local marketing strategies and working with regional delivery services to improve customer experience. Experts predict that Temu’s total sales (GMV) in 2024 could reach $30-$36 billion, and potentially reaching as high as $60 billion, as the company focuses on both new and existing markets.
Going forward, Temu is investing in new technologies, such as artificial intelligence recommendations and augmented reality shopping, to make online shopping more engaging and personalized. By focusing on affordable prices, better quality and sustainable practices, Temu is determined to transform the e-commerce world and solidify its position as a global leader.
Sources
https://www.calcalistech.com/ctechnews/article/hywehsdba
https://www.corvuspay.com/en/blog/story-of-temu/
https://www.chinatalk.nl/the-current-state-of-temu/
https://www.businessofapps.com/data/temu-statistics/