Not yet one month old, industry observers are declaring e-commerce newcomer Temu to be a serious contender in the US online shopping pecking order.
Temu is the latest e-commerce site to launch in the US, promising to “empower consumers with access to high-quality goods at affordable prices.” Just weeks into its operation, the Temu app knocked Amazon briefly off the download charts. The newcomer has already been cast variously as a challenger to Amazon or Shein, the fast fashion shopping app.
Time is an “appealing, even platform” that could give customers “a reason to linger beyond ordering an Instagram-ready look” with its wide selection of products beyond fashion categories, according to Business of Fashion (BoF), the digital trade publication.
It is the “most serious threat to Shein’s dominance yet” given its backing from parent company PDD, the BoF report said. Temu’s sister company, Pinduoduo, is a “digital shopping behemoth” with more than 11 million suppliers serving close to 900 million consumers. The two companies are operating under Nasdaq-listed PDD, a member of the Nasdaq 100 Index, the tech-heavy benchmark that counts Apple, Microsoft, and Amazon among its constituent stocks.
Temu is able to tap into Pinduoduo’s existing relationships with suppliers and add thousands of new items to its platform each day. Their Nasdaq-listed parent has a market capitalization of about $80 billion and generated $5 billion in revenue in the latest quarter, potentially giving Temu plenty of punching power to last the fight.
Unlike other e-commerce sites that push poorly made cheap products, Temu has “put a number of quality controls in place,” BoF noted. The company refunds customers for products that arrive late or are damaged. The company also curates the products that go onto its site, with a preference for working with suppliers that have experience selling to overseas markets.
Given Temu selects the products instead of just connecting buyers and sellers, consumers can expect that the items offered meet their expectations, said Robin Zhu, a senior internet company analyst with AB Bernstein, a research firm.
Vivian, a resident of a city on the east coast of the US, ordered a tea filter, a charging cable, a pet feeding bowl, a cat play set and a quick-drying beach towel on Temu. After the 30% website-wide discount, the bill came up to $11.18 for the five items.
She had ordered from Temu not expecting high-quality items at such a low price, but “their quality exceeded my expectations, with most being in line with the description,” she told PingWest, a digital publication covering the tech industry.
Quality control may prove to be a differentiating factor down the road, especially if Temu is able to deliver on its promise to work with manufacturers to create products tailored to consumer needs. The industry was given a preview of that plan after Pinduoduo announced this week that it would work with its suppliers to create 100 global brands and connect 10,000 manufacturers directly to overseas markets, which presumably would include Temu and the US market.