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- Written by Sam Groot
- business and technology reporter
image source, Getty Images
It is estimated that 152 million Americans use Temu every month
A record 123 million Americans watched this year’s Super Bowl.
But not only did we get some camera shots of the country’s biggest sporting event, a blockbuster halftime performance, and Taylor Swift in the crowd, we also got six 30-second commercials for Chinese-owned e-commerce company Temu. did.
The shopping giant has been criticized by politicians in the UK and US, and a US government investigation found there was an “extremely high risk” that products sold at Temu were made with forced labor.
Tem says it “strictly prohibits” forced, penal, and child labor by all of its franchisees.
The company, which sells everything from clothing to electronics to furniture, first launched in the U.S. in 2022, followed by the U.K. and the rest of the world.
Since then, it has consistently topped the global app download charts, with just under 152 million Americans using it each month, according to data collected by analyst SimilarWeb.
Retail analyst Neil Saunders says it’s “Amazon on steroids” and has exploded in popularity with the tagline “shop like a millionaire”, shipping to 49 countries around the world.
According to SamelWeb, Temu spent nearly $1.7 billion on advertising in 2023
A typical 30-second Super Bowl commercial costs around $7 million (£5.5 million), and Teme ran six of them during this year’s event.
“Very short commercials cost a lot of money,” Sanders said.
“But we do know that it was seen by a huge number of people and that commercial Temu downloads have skyrocketed since then,” he added.
Personal visitors to the platform worldwide rose by nearly a quarter on Super Bowl day compared to the previous Sunday, with 8.2 million people viewing websites and apps, according to data from Similar Web. During the same period, Amazon and Ebay saw their visitors decline by 5% and 2%, respectively.
“They also spent large amounts of money on micromarketing, convincing influencers to promote their products or offer to buy them on their platforms via social channels like TikTok and YouTube.” says Mr. Sanders.
These influencers typically have fewer than 10,000 followers, according to Ines Durand, an e-commerce expert at Similarweb.
“Micro-influencers have a strong community, so their endorsement signifies strong trust in these products,” she explains.
Temu is owned by Chinese giant Pinduoduo and is, according to Shaun Rein, founder of China Market Research Group, “a monster of Chinese e-commerce.”
“Across China, everyone is buying products on Pinduoduo, from speakers to T-shirts and socks,” he says.
The company regularly replaces rival Alibaba at the top of the most valuable Chinese companies listed on U.S. stock exchanges. It is currently worth just under $150bn (£117bn).
With the Chinese consumer market hooked, Pinduoduo expanded overseas with Temu using the same model that ensured its previous success. Mr. Lane, who is based in Shanghai, said the company is a great source of pride and patriotism.
“They are proud that Chinese companies can defeat US e-commerce dragons like Amazon,” he added.
A quick scroll through Temu’s app or website reveals everything from steel-toe-cap trainers to devices designed to help seniors and pregnant women put on socks. Lane explains that most industrial products are produced in factories in China.
“Temu uses a great system that relies on massive data collection at scale,” says Ines Durand.
“They collect data on consumer trends, the most searched for and clicked on products, and provide it to individual manufacturers.”
Ms. Durand said that while Amazon sells this data to manufacturers at a high price, Temu provides it to manufacturers for free, meaning they can “test the market” with a relatively small number of products. It states that the information will be used for
Durand said the platform often uses AI-generated images to stay on top of the latest trends, so the products being sold may not yet exist. It will then be airlifted.
“This means there is no need to store the product. Once it is transported by plane, it goes directly to the customer without having to go to a warehouse,” says Ines Durand.
image source, Getty Images
Temu is shipped directly to customers from our factory in China
Last year, one-third of the shipments that entered the United States using a shipping loophole known as the de minimis threshold came from Temu and competitor Shein, according to a U.S. Congressional report.
Many countries, including the UK and the US, have minimum standards in place to help their citizens import goods.
As a result, Tem’s products are shipped directly from the factory without going through any intermediaries, making them essentially tax-free.
But Mickey Diaz, chief operating officer of global shipping company Unique Logistics, said further regulations could be introduced to close shipping loopholes.
“The UK has already started to look at TEMs with some degree of scrutiny, which were originally imported because of loopholes such as the sale of arms that were not allowed into the UK,” she explains.
Temu has also been criticized for its supply chain, with British and American politicians accusing the e-commerce giant of allowing goods produced with forced labor to be sold on its sites.
Tem says it “strictly prohibits” forced, penal, and child labor by all of its affiliates.
It told the BBC that anyone doing business with the company must “adhere to all regulatory standards and compliance requirements”.
“Temu’s distributors, suppliers, and other third parties must pay their employees and contractors on time and comply with all applicable local wage and hour laws.
“Our current standards and practices are no different from other leading e-commerce platforms trusted by consumers, and any allegations in this regard are completely unfounded,” the spokesperson added.
Despite the controversy, analysts expect further expansion of TEM.
Retail analyst Neil Saunders predicts: “We’ll probably see teams start to further enhance their propositions, perhaps introducing slightly higher-priced products.”
Sean Reid said the focus will be on capturing an even larger slice of the market.
“Their strategy for the next two to three years is just to increase brand awareness and market share. They don’t care about profits.
“That’s exactly what happened when Pinduoduo launched in China. They were offering incredibly cheap deals just to gain market share.”
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