Source: us.temu.com
Will Temu have Shein-like success as it goes online in the U.S.?
Temu has officially launched its website in the U.S.
The Chinese e-commerce marketplace features a wide variety of inexpensive products in the apparel and footwear, beauty and health, home and garden, electronics, office products, pet supplies and sports and outdoors categories.
The site, which has a Shein-like presentation, is currently offering 30 percent discounts on the first three purchases with no minimum. It is also adding free shipping and returns to entice consumers to order. Shoppers can access the site at temu.com or through available apps.
The marketplace operator says that it is able to offer low prices due to its “access to a global network of suppliers and fulfillment partners.” Temu says that it shares sourcing and fulfillment with its “sister e-commerce company” Pinduoduo, which is listed on Nasdaq under the PDD symbol. Pinduoduo “has worked with more than 11 million global merchants and handled 61 billion orders in 2021,” according to the Temu press release.
CNBC reported on Temu’s soft launch earlier this month. It characterized the move as a way for Pinduoduo to seek growth outside of the struggling Chinese market. The company, which was founded in 2015, is a smaller e-commerce player in its home nation where Alibaba.com and JD.com dominate.
Customers ordering from Temu will typically have to wait between seven and 15 business days from the time of purchase for their deals to be delivered. The site’s shipping page cautions customers that they may see longer delivery times than they are accustomed to because orders may be shipped “from another country or need to be bundled or packaged with other similar-sized items. Other external factors, such as current events or shipping carrier delays, may change the actual arrival time of your item.”
The CNBC piece points out that Temu comes to the U.S. to face entrenched sites including Amazon.com that American consumers have come to rely on. The company’s “group buying” approach gives it the ability to dramatically cut the price of goods, a strategy employed by Shein, which has made it the go-to site for millions of American teens.
Rui Ma, a Chinese technology analyst and host of the podcast Tech Buzz China, wrote on Twitter, “I agree that targeting the U.S. market is ambitious, but it is also true that Amazon has clear weak spots, such as fashion, which has made success stories such as Shein possible. But they for sure need to do better quality control for merchants, or else risk going the way of Wish.”
- Temu Brings Hard-to-Beat Promotions to Consumers With Launch of Global Online Marketplace – Temu/Globe Newswire
- China’s e-commerce giant Pinduoduo quietly launches U.S. shopping site in Amazon challenge – CNBC
- The largest Chinese e-commerce company you have never heard of is about to enter the U.S. with a model to challenge Amazon’s dominance – Fortune/Yahoo Finance
- Rui Ma – Twitter
Discussion Questions
DISCUSSION QUESTIONS: What do you see as Temu’s major challenges as it enters the U.S. market? Do you think a Shein-like model represents a competitive threat to Amazon, Walmart and other U.S.-based online marketplace operators?
Poll
Loading …BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Evan Snively
Director of Planning & Loyalty, Moosylvania
If Temu is prepared to be as ubiquitous as Shein is on social media, it might have a chance. That’s a tall order, though; Shein is everywhere.
I see the longer shipping timelines as a huge hurdle for U.S. consumers to overcome in adopting Temu. Amazon is an extremely entrenched retailer in shoppers’ behaviors. It will take a lot for that to change.
This is going to be a huge competitive threat to Amazon and Walmart. Temu also launched its U.S. app at the beginning of the month, and for context, Shein’s app surpassed Amazon as most downloaded shopping app in the U.S. at the halfway point of this year. Shopping apps developed in China are far ahead of the U.S. when it comes to recommendation engines, gaming elements, interactivity, and overall how to make an app addicting. Compare this description to the static experience that we are used to on Amazon and Walmart, and then add in group buying. Group buying enables a family unit or roommates to load up one cart from their own devices and get a discount for social shopping. This will have a fun novelty for U.S. consumers and give them the one thing that everyone shopping is after right now: discounts.
By the way, Shein used to have long shipping windows, but not only did U.S. shoppers think it was worth the wait, it encouraged them to buy more at one time, which gave way to the Shein haul. As Shein grew, it was able to open a fulfillment center in California.
I’d like to learn more about Shein’s issues around sizing and product quality — even understanding that it’s positioned as essentially “disposable clothing,” the memes of “I ordered this princess dress and got a trash bag” are strong around that site. Has there been improvement or is Shein still churning through a very large young Millennial/older Zoomer cohort?
Long shipping times could be the death of Temu before it even gets a toe-hold. U.S. consumers tolerance for wait times – even for cheap goods – is typically in the three to five day range, but anything longer starts to fray a relationship. Amazon, and most recently the quick commerce entrants, have cut the wait time from days to hours to minutes. I could be easily proven wrong, especially, with inflation continuing to rise, but Temu saying it could be two weeks for product delivery seems like a huge stretch for the U.S. market.
Awareness and securing a repeat customer base will be the early challenges. The American consumer is used to instant gratification, that will be a huge hurdle for Temu to combat.