In China, it took them only 4 years to gain 25% of the market, while Alibaba, on the other hand, dropped from 80% to 50%.
It has been in the US since September 2022 and already has 60 million monthly users, which is about 17% of the discount retail market. What Temu managed in 1 year, it took Amazon 9 years.
Chart of Shein vs Temu in the US market:
marketing – last year they spent 69 billion crowns, almost half of it on Meta (in the US it has 76% on social networks and 13% display, 46% FB, 22% IG, 15% YT). They had 6 spots at the last Superbowl!
their slogan: “shop like a billionaire”
higher prices at auction – such bc data malaysia investments of course mean increasing competition at auctions
lower margins – pushing other players to lower prices. Amazon may also be putting pressure on suppliers to lower prices.
But that’s not all!!
US tax exemption : US tax exemptions allow low-value package imports to enter the US duty-free
Supply chain : There are currently what is retargeting & how do retargeting ads work? more than 100,000 Chinese merchants on Temu. Many have had to switch from Shein to Temu because Shein has started accepting only suppliers with larger factories.
Li, the owner of a bag factory, said he usually makes less than 20 percent profit margins with Shein, but about 15 percent with Temu . However, if a product sells well, Temu will buy similar goods from other suppliers, forcing factories to compete and further reduce prices. The advantage over other large companies (HM), is that suppliers are paid significantly faster.
And why is it able to grow so quickly?
In-app gamification: According to research company Attopia, customers spend twice as much time in the Temu app as in competitors’ apps.
In Q2, it was an average of 18 minutes per day, and in October it was even 22 minutes. In comparison, it is 10 minutes in the china phone numbers Amazon app and about 11 minutes in the Aliexpress app.
Temu’s strategy for keeping users on the app as long as possible is to be an addictive app. It achieves this by having users play games in the app for which they receive rewards, including roulette, where you can win a coupon whose value increases if you make a purchase within 10 minutes.