Monthly users of Temu are estimated to be 152 million in the US.
Six 30-second ads for Temu, an e-commerce business owned by Chinese nationals, aired during the nation’s most watched sports event, which included a blockbuster halftime performance and many camera cuts of Taylor Swift in the audience.
Both British and American lawmakers have spoken out against the retail behemoth, with one US government probe indicating a “extremely high risk” that certain Temu items may have been manufactured using forced labor.
According to Temu, the company “strictly prohibits” its merchants from engaging in any kind of forced, punitive, or child labor.
The multi-product retailer debuted in the United States in 2022 before expanding to the United Kingdom and beyond.
Since then, according to statistics collected by analyst SimilarWeb, it has remained at the top of worldwide app download lists, with around 152 million Americans using it on a monthly basis.
Retail expert Neil Saunders calls it “Amazon on steroids,” and the slogan “shop like a billionaire” explains why it has become so popular—and why it now ships to over 50 nations across the globe.
Ad for Temu TemuAccording to SimilarWeb, Temu spent over $1.7 billion on advertisements in 2023.
During this year’s Super Bowl, Temu aired six 30-second ads, each of which cost around $7 million (£5.5 million).
“It’s a lot of money for a very, short commercial,” remarks Mr. Saunders.
“But it is seen by an enormous number of people and we know that after that commercial Temu’s downloads spiked” according to him.
A total of 8.2 million individuals used the website and app on Super Bowl Sunday compared to the previous Sunday, according to statistics from SimilarWeb, a roughly 25% increase. At the same time, 5% fewer people visited Amazon and 2% less people visited eBay.
“They’ve also spent a lot of money on micro-marketing, persuading influencers to push products and to suggest buying things on the platform via social channels like TikTok and YouTube,” Mr. Saunders points out.
In most cases, these influencers don’t have more than 10,000 followers, says Ines Durand of SimilarWeb, an authority on online retail.
“Micro-influencers have strong communities, so their endorsement means a strong trust towards these products,” according to her.
According to Shaun Rein, founder of the China Market Research Group, PDD Holdings is “a monster in Chinese e-commerce” and owns Temu.
“Throughout China, everyone buys products on Pinduoduo, from speakers to t-shirts or socks,” according to him.
When it comes the most valuable Chinese enterprise listed on a US stock market, the company is always in a back-and-forth with Alibaba. At now, its value is little less than $150 billion (£117 billion).
Having captivated the Chinese consumer market, PDD Holdings used the same methodology that had brought them success before to expand internationally with Temu. The Shanghai-based Mr. Rein claims that the company has grown into a national treasure.
“They’re proud that Chinese companies can slay the e-commerce dragons from the United States like Amazon,” according to him.
You may get everything from steel-toecap sneakers to a sock-putting gizmo for the elderly and pregnant ladies on the Temu website or app. A plethora of manufactured items, practically made in China, as Mr. Rein elucidates.
“Temu use an amazing, system that relies on, heavy data collection at scale,” Ines Durand points out.
“They collect data on consumer trends, the most searched and clicked products, which they give to individual manufacturers.”
According to Ms. Durand, manufacturers may get this data for free via Temu, although Amazon charges a premium for it. This data is used by producers to “test the market” with a limited number of items.
Reports from US Congress indicate that Temu and Shein accounted for one-third of the shipments that entered the US last year under the de minimis threshold, a shipping loophole.
To facilitate the import of commodities, some nations have established de minimis thresholds; the United Kingdom and the United States are among them.
Therefore, because Temu’s items are supplied straight from the production floors, eliminating intermediaries, they are effectively exempt from duty.
Mickey Diaz, COO of worldwide freight business Unique Logistics, however, claims that new regulations to seal shipping gaps are in the works.
“The UK has already started to look at Temu with some scrutiny, including the sale of weapons that are otherwise not allowed into the UK, which were being imported because of these loopholes,” according to her.
A number of legislators in the United Kingdom and the United States have accused the e-commerce giant Temu of enabling the sale of items made using forced labor as part of its supply networks.
Head of the foreign affairs select committee Alicia Kearns MP expressed her desire for online marketplace regulation to ensure that “consumers are not inadvertently contributing to the Uyghur genocide” in an interview with the BBC last year.
According to Temu, the company “strictly prohibits” its merchants from engaging in any kind of forced, punitive, or child labor.
“Comply with all regulatory standards and compliance requirements” is what it advised the BBC clients must do.
Third parties doing business in Temu have a responsibility to their workers and contractors to pay them on time and in accordance with the local wage and hour regulations.
“Our current standards and practices are no different from other major e-commerce platforms trusted by consumers, and allegations in this regard are completely ungrounded,” a company representative said.
Regardless of the debate, experts predict that Temu will continue to grow.
Retail expert Neil Saunders expects that teams will begin to expand their offerings and maybe provide somewhat more expensive items.
The goal, as stated by Shaun Reid, is to increase market share
They want to focus only on increasing their brand’s visibility and customer base over the next 2-3 years. Making money isn’t important to them.When Pinduoduo first debuted in China, that is precisely what occurred. They were offering ridiculously low prices in an effort to corner the market.
