Temu Is Helping Consumers to Shop Smart and Save Big

Linda Johnson, a retired teacher from Ohio, was hesitant to try a new e-commerce platform after having relied on traditional retailers like Walmart for decades. But after her daughter recommended Temu to her, she decided to give it a try.

“I was skeptical at first, but the prices were too good to pass up,” said Johnson, who is 67. “I ended up buying a set of kitchen knives for less than half the price I would have paid at Walmart, and they’re just as good, if not better.”

Johnson’s positive experience with Temu is not uncommon. The Boston-based e-commerce platform has taken the country by storm with its affordable prices and wide selection of quality consumer goods, sourced from a global network of suppliers cultivated by its parent, Nasdaq-listed PDD Holdings Inc.

Temu’s commitment to offering affordable prices has proven successful, with the app being downloaded 24 million times in just six months, according to Sensor Tower. Temu hit another milestone with its Super Bowl commercial, “Shop Like A Billionaire,” which generated a 53% day-over-day increase in app downloads and pushed the platform into the national limelight.

Temu Has Lowest Prices Among Global Peers

The reputation for value was reaffirmed by research showing that Temu’s prices rank among the lowest compared with global peers, including Amazon and Walmart, according to an analysis by Sanford C. Bernstein. A $9.09 portable heater on Temu costs twice as much on Amazon, while Christmas tree decor was four times the price on the latter, Bernstein research found.

At the heart of Temu’s success is its unique approach to sourcing and manufacturing. The platform is owned by PDD Holdings Inc., a $100 billion Nasdaq-listed multinational commerce group that operates a portfolio of businesses globally, including Pinduoduo, a popular social commerce app in China and Temu in North America. PDD Holdings has built up a vast network of over 11 million merchants from around the world, enabling Temu to secure a wide array of merchandise at the most affordable prices from global producers.

Temu is able to offer unbeatable prices to consumers by removing the middlemen and reducing the number of intermediaries and layers of costs in the traditional supply chain. By connecting consumers directly with manufacturers, Temu is able to cut out the costs associated with multiple layers of distributors, and retailers. As a result, the platform is able to pass on significant savings to its customers.

This unique business model allows Temu to source high-quality products from around the world and offer them at prices that are hard to beat. Through its direct-to-consumer approach, Temu is revolutionizing the way consumers shop for everyday items, while also empowering them to save money on products they need and love.

Temu Cutting Out “Bloated Cost” in Supply Chain

Michael Felice, an associate partner at management consulting firm Kearney, said Temu stood out simply by selling products without high markups. “Temu might be exposing a white space in the market wherein brands have been producing at extremely low cost, and along the value chain there’s been so much bloated cost passed on for margin,” he said.

Temu’s emergence comes at an opportune time. According to the latest LendingClub report, 60% of Americans are living paycheck to paycheck, while consumers across all demographics are looking to make more of their household budgets. Temu’s mission to democratize access to quality goods by offering them at affordable prices has resonated with millions of Americans who seek to maximize their budget without compromising on quality.

Tina, a working mother from New York, was scrambling to find affordable Thanksgiving presents for her family when she stumbled upon Temu.

“I started out buying some cheap car accessories and kitchen utensils, but I was pleasantly surprised by the quality,” Tina said. “So I decided to try out some baby clothes and even shoes, and they were just as good as what I could find at a retail store. Plus, everything arrived within a week, which was a huge relief.” Tina has since become a regular Temu shopper, relying on the platform for her everyday needs.

Temu and the New Era of e-Commerce

Beyond reducing the “hidden” costs of traditional retail to make shopping more affordable, Temu is also making sure that shopping becomes more targeted. The platform has implemented its Next-Gen Manufacturing model, using insights into consumer preferences to help manufacturers fine-tune their product development.

Temu’s Next-Gen Manufacturing program is designed to help medium to large-scale manufacturers optimize their designs, production, inventory, and branding decisions by providing them with a better understanding of what consumers want and need.

By connecting manufacturers directly to consumers through Temu’s platform, the program enables manufacturers to more accurately align their designs, production, and inventory with consumer demand, thereby reducing waste and increasing efficiency. Temu is helping manufacturers make more informed decisions that ultimately benefit both the manufacturer and the end consumer with more targeted and in-demand products.

Ashlee Nordquist, 39, an optician in Fargo, North Dakota, could never shop anywhere else after using Temu. She bought many items such as fishing gear, portable washing machine, hooks, sponges, electric iron, vacuum sealer and other homeware, which cost her a total of $450. She used to buy these products from Amazon or Walmart but now prefers Temu for its low prices. They can go as low as one-eighth of what her local supermarket charges, she said.

“I feel like I was getting robbed, shopping at other places.”