Let's Talk

LATEST NEWS / 22 - 11 - 2023
What is Temu and the Logic Behind its Operation.
If you’re a fan of online shopping, then it’s most likely you’ve heard of or even have made a purchase from, the newly raised chinese-owned online shopping platform, called Temu. It is basically a huge online marketplace that sells a variety of products, from clothing and accessories to home decor and electronic gadgets. And all of that, in extremely discounted and low-prices contrary to traditional shops. But where is the catch ?
What is Temu and the Logic Behind its Operation.

What is Temu? 

Founded in only last year’s July, Temu, has marked the e-commerce business and officially competes along with some of the most famous online shopping platforms like Amazon, Wish and Shein in just over a year. Owned and operated by the company PDD Holdings, it instantly gained consumer interest for a number of reasons. The platform hosts a plethora of everyday items at significantly reduced prices, that are shipped from China-based vendors to customers all over the world. Its main way of operating and selling such low-priced products is by voluntarily reducing its profit margins in the delivery and sellers' sectors. Concurrently, it’s a one-place-find-all kind of app, something undoubtedly convenient to find everything you’re searching for, avoiding multiple apps, purchases and shipping. Customers are also offered a 90-day free return with a full refund, in case the purchased goods do not reach their expectations. The ability to purchase on Temu is reached through your Internet browser or through their dedicated mobile app, available both for Android and iOS.


How Does it Operate?  

Temu works like all similar online shopping platforms do. That is, by offering consumers free goods, credits and points, as well as discount coupons when playing games and sharing these personalised affiliate codes with their friends. They often collaborate with influencers especially on the TikTok platform and utilise social media for brand awareness and constant reminders of their products. This way of influencer marketing implemented, is considered quite smart, aiming both at teens-children as well as adults to sign up and download the app. This gamification process, refers to the application of game-like elements, such as competition, rewards and interactive challenges, in non-game contexts. In this particular case, it involves using game design principles to engage and motivate individuals, encouraging purchases and achieving brand awareness through sharing. As perceived, it constitutes a form of shopatainment, where users go into the app just to browse through when they’re bored and don’t have anything to do. Spending money comes with spending time, on a shopping app that gifts you pleasure by playing games or by just scrolling through it. This strategy along with discovery-based shopping, a new form of finding and purchasing products that has increased in popularity, constitute the perfect marketing plan that Temu actively implements. The endless possibilities and product recommendations offered in this app, allow the continuous scroll respectively, with the hope you gain the desire to buy items you didn't originally search or went into the app for! Consequently, you end up buying more than you initially needed, with the thought that you actually need them! TikTok and Shein, another online shopping app that has also grown in the e-commerce industry, have also integrated this purchase model and proven its effectiveness. Lastly, Temu is extremely conscious of starting with a substantial marketing budget in order to launch a business and ensure its success and visual establishment. Companies of small size are not in a position to afford gradual user growth and need to obtain rapid acquisition instead. Gathering a large amount of data and ulitizing paid advertising - both Google Ads and Shopping Ads - constitute the most efficient means in order to spread this rapid expansion.

Craft the Perfect Marketing Plan too, with Wizard!

Concerns about Temu  

Despite all the benefits, concerns have risen regarding the Temu app and whether specific legislation is followed. To elaborate, this specific eshop, is often considered controversial or sketchy and with plenty of…red flags. These mainly compose scammy listings, undelivered products or delayed purchases. But that is not all! Damaged products have been detected and at the same time, customer service is at least inefficient or in some cases even completely lacking.

Collection and sharing of data has also alerted the US Government in the past with privacy concerns regarding Temu’s sister company “Pinduoduo” which was actually suspended by Google due to the discovery of Malware. Last but not least, it is most important to note that accusations have been made concerning item production and correlated forced labour, as reported and published by the US Select Committee.

Amid the bustling world of e-commerce, Temu has emerged as a real contender, offering a tempting range of products and clever marketing tactics. Despite its relatively short existence of just over a year, it has gone head-to-head with industry heavyweights, all thanks to its mix of great deals, user-friendly features and a shopping experience that feels more like a game. However, while Temu offers remarkable benefits, it is not without its share of concerns. Reports of scam listings, delivery issues and data privacy have raised legitimate questions about its operations and transparency. So, whether it succeeds in addressing the raised concerns while maintaining its appeal, remains to be seen.

Read All about E-commerce. 

Alexandros Kokolis Avatar
Alexandros Kokolis
22 - 11 - 2023.
Scale Up Your Business Ask Free Consultation