Temu, a new online shopping platform, has surpassed American e-commerce giants Amaz and Walmart, becoming the most downloaded app in the United States. The Boston-based online retailer made its Super Bowl debut on Sunday.
Temu, which was launched in 2022 by a US-listed parent company Pinduoduo, operates an online superstore for literally everything, from home goods and apparel to electronics. Pinduoduo is one of China’s most popular e-commerce platforms with about 900 million users. The application, since its rollout in September, has been downloaded 24 million times. It has racked up more than 11 million monthly active users.
A major factor that pushes Temu above its competitors is its ads which are both in English and Chinese language. The online retailer, as per Meta, runs over 1,000 ads on its platforms since September.
A spokesperson for the company said consumers at Temu can shop with a sense of freedom because of the price. “Feel like you’re splurging by buying lots of stuff cheaply. A woman’s swimsuit on Temu costs just $6.50, while a pair of wireless earphones is priced at $8.50.
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An eyebrow trimmer costs 90 cents,” says a 30-second video. Abe Yousef, a senior insights analyst at Sensor Tower – an analytics firm, said US app installations for Temu in the fourth quarter of 2022 exceeded those of Amazon, Walmart and Target. “Temu soared to the top of both US app store charts in November, where the app still holds the top position now.” The analyst pointed out that the company had been particularly successful at acquiring new users by offering extremely low prices and in-app flash deals, such as 89 percent off certain limits.
Michael Felice, an associate partner at Kearney, said Temu stood out by selling products without high markups. “Temu might be exposing a white space in the market wherein brands have been producing at extreme low cost, and along the value chain there’s been so much bloated cost passed on for margin.” Felice believes American consumers might not even be ready to accept some of these price points.
But Deborah Weinswig, the CEO of Coresight Research, warned that it may be too early to tell whether Temu will be able to maintain its extremely low prices, free shipping and other perks. She highlighted that Temu aims to continue to experiment in marketing and offerings, which is possible because of its resource-rich parent company.