Minimal guide to Temu, the TikTok of ecommerce that has already conquered the USA from China
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Google Maps, ChatGPT, McDonald’s, Shein, TikTok: watch the ranking of the most downloaded apps on iOS, these days, surprises are very few. There is a pretty big one, however, right in first place: it’s Temu, an ecommerce platform of Chinese origins that recently landed in our country.
This is not really a new name in the international tech scene: Temu is owned by PDD Holdings, the company that created the online shopping site Pinduoduo. It is a Chinese ecommerce giant with 750 million users a day: founded in 2015, it has forcefully entered a market hitherto dominated by the usual suspects, Alibaba and JD. A success that, a bit like happened with Douyin first and TikTok thenwas exported to the United States and then slowly to the rest of the world.
In the US, the launch of Temu made noise: very quickly, it reached first place among the most downloaded apps in the country. According to CNN, in the first 6 months after the debutthe app has over 24 million downloads, surpassing Amazon and Walmart.
It is not the first time that a platform born in China arrives in the US and Europe and immediately met with great success. It had happened with TikTok, first of all, but also with Shein, which shares the nature of ecommerce with Temu. Each story, however, is different and there are at least 3 reasons so the Pinduoduo platform is also emerging in the western market.
Collaboration
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A discovery platform
Let’s start from the beginning: Temu is an ecommerce platform seemingly like any other. There are products of all kinds, from electronics to clothing, to household items, at extremely low prices. At first glance, he looks more like Wish than Shein.
What’s new, though, is how it works. How well he tells an analysis on a16z, the Temu model is based on discovery and not on research. Just as TikTok provides the user with an endless stream of videos, in the same way a substantial part of the main screen of the Pinduoduo platform is occupied by the Recommended section. That is, a list of products, based on the user’s interests and ordered by an algorithm: Andreessen Horowitz’s magazine defines it shopatainmentthe intersection of entertainment, digital content and online retail.
It’s a very Chinese approach, also of platforms such as Taobao, which is now the largest ecommerce in Beijing, and its spinoff Tmall. The idea is to replicate the experience of visiting physical stores as much as possible: I go in to have a look, spend some time and maybe decide to buy something I didn’t need.
Shopping becomes a game
Within Temu there is the possibility of accumulating credit, which can be used to make purchases on the platform. One way to earn money is to play the mini-games in the app – they unlock entering codes in the search bar (there is a Reddit thread dedicated to Italy) and by winning you get money to spend on products or even free items.
Yes they can earn credits even suggesting the subscription to another user: the social component is another of the main features of Temu. In the international version, for the moment it is exclusively limited to sharing links via instant messaging and social networks; on the Chinese one Pinduoduo there are even buying groups on WeChat which allow you to buy items together, obtaining discounts and benefits.
The advertising investment
Just like TikTok and Shein, Temu entered the western market and immediately achieved significant success. It is an approach inaugurated precisely by the ByteDance platform which, according to some newspaper reports, he spent a billion dollars on advertising upon arrival in the United States.
We are not on those figures, but the feeling is that Temu is investing a lot especially in advertising on social networks. At the time of writing, Meta’s Ad Library indicates over 1500 active ads only in our country. At the same time, the numbers on TikTok are also growing: the hashtag in Italian already has over 10 million views.
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The risks (also for workers)
The success in the United States brought with it a number of controversies. Some concern the functioning of Temu itself: we speak, in particular, of delays in deliveries and damaged objects or objects that do not correspond to the descriptions. Which is somewhat a typical feature of aggregators such as the Chinese platform, born to bring together different producers, with different characteristics and specificities, and with a relative degree of control over what happens.
The doubts also concern the conditions of the workers of the many factories that produce the objects then sold on Temu: a Bloomberg investigation revealed how some of the objects on the platform are produced in Xinjiang, where the exploitation of the Muslim minority of the Uyghurs is frequent.
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