The Chinese online marketplace Temu is making a powerful push into Europe’s core e-commerce markets. Although Wish and Shein are already established in Germany, Temu is still little known in this country. The company plans to offer a wide range of non-food items at extremely low prices and deliver them directly from China to end customers. Temu is part of PDD Holdings, to which Pinduoduo also belongs. Unlike Shein, Temu has operated mainly in China, but expanded into the US last year and launched in Australia, New Zealand, France, Italy, Germany, the Netherlands, Spain and the UK this year. Temu’s app has already topped the shopping app download charts in these countries.
Temu is a unique social media commerce platform that is different from traditional shopping apps. The company specifically uses social media channels such as TikTok to generate demand. In addition, Temu relies on gamification elements and affiliate codes to promote the growth of the platform. Temu’s business model thus combines shopping and social media in an innovative way.
Temu is offering generous discounts for its launch in Germany, including 8 euros off from a basket value of 60 euros, 20 euros off from 100 euros and 40 euros off from 150 euros. Free shipping is also currently advertised, with a delivery time of about a week and a 90-day return guarantee. Temu is also investing in an Ambassador programme, where rewards worth up to 1,000 US dollars are given to those who attract new customers in the USA.
According to experts, prices at Temu are sometimes up to 80 percent lower than those of comparable items at other retailers. The assortment includes a variety of categories such as fashion, beauty products, electronics, home improvement items and household goods. Thousands of new items are added daily, similar to other well-known shopping apps such as Wish and Shein. However, the quality of the products is often considered inferior by consumers, as shown by numerous comments on social media.
Temu acts as a marketplace model and offers Chinese suppliers and manufacturers reach, technology, marketing and logistical handling. In return, the platform charges manufacturers a commission of around 25 to 30 per cent of the sales price.
Details on Temu’s logistical handling are limited so far. It is assumed that the company stores goods from Chinese suppliers in fulfilment centres in China. From there, they are sent to the target markets by air freight via Asian logistics service providers and delivered in Germany with the help of local mail and parcel services such as DHL. Delivery times are seven to ten days, which is why transport by container sea freight is excluded.
In Europe and the USA, there is so far no comparable social commerce platform like Temu, which combines customer approach, awareness and product range so successfully. The company could therefore serve as a benchmark for the future development of online commerce, especially with regard to “discovery-based online shopping”, in which the Metaverse could also play a role as an integrated component. Temu shows how a platform can successfully use the potential of social interaction and the discovery of new products, and could thus point the way for innovative approaches in e-commerce.
Update: There is a detailed box office video on Temu. Have fun: https://www.youtube.com/watch?v=pta8PBGwFrU