Temu, an online shopping platform owned by Chinese social commerce giant Pinduoduo, has quickly become the most downloaded app in the United States, surpassing Amazon and Walmart. Temu recently made its Super Bowl debut, encouraging consumers to “shop like a billionaire” through their commercial that showed they can buy virtually everything at extremely low prices. Temu offers a wide selection of products at significantly lower prices, drawing comparisons to Shein, the Chinese fast fashion upstart that has also made significant inroads into markets including the United States. Temu is considered a competitor of Shein, along with US-based discount retailer Wish and Alibaba’s AliExpress, according to Coresight Research.
Last year, PDD launched its US-listed subsidiary, Temu, which changed its name this month. Pinduoduo, the popular e-commerce platform with 900 million users, used a group-buying model that allows users to purchase items in bulk at discounted prices. Temu now uses the parent company’s network to offer quality, affordable products.
In September, the SheIn application and website gained 24 million downloads and over 11 million monthly active users, according to Sensor Tower. In the fourth quarter of last year, Temu outdid Amazon, Walmart, and Target in US app installations, thanks to its low prices and flash deals.
Abe Yousef, a senior insights analyst at Sensor Tower, said that Temu dominated both the iOS and Android mobile app stores in November and still holds the top position. Yousef attributed the company’s success in acquiring new users to its in-app flash deals, such as discounts of up to 89% on certain items.
In an interview with CNN, a market analyst shared his thoughts on Temu’s potential impact on the market. According to him, Temu’s launch may have revealed a gap in the market where some brands have been producing products at an incredibly low cost, while the value chain has been passing on bloated costs to consumers for profit.
However, he also pointed out that American consumers may not be accustomed to such low price points and may even question the quality of the products. The analyst raised the age-old question of “is it too cheap to be good?” which has often been a concern for budget-conscious shoppers.
Despite this, it is important to note that Temu has already gained significant traction in the market, with its app installations exceeding those of major e-commerce players like Amazon, Walmart, and Target in the last quarter of 2022. This is largely attributed to Temu’s unique business model, which offers users flash deals and discounts of up to 89% on select products.
By leveraging its parent company’s vast network and expertise in the e-commerce industry, Temu aims to offer a wide range of quality products at affordable prices to consumers. Its expansion into Canada is also an indication of its ambition to become a major player in the global e-commerce market.
