Everything you need to know about Temu
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Business
Temu is the "sister company" of Chinese e-commerce giant Pinduoduo. Launched in September 2022, the multi-segment marketplace has rapidly become a household name in e-commerce today.
Creation
Temu was first launched in the US by PDD Holdings, parent company of Pinduoduo (a Chinese firm founded in 2015). The platform and mobile app was then made available in the UK in 2023, as well as in Spain, Italy, France and the Netherlands.
Temu's offering revolves around a number of segments, including fashion items among other things. It is also possible to buy unbranded products within the home, toys and electronics categories.
The platform's success stems from a number of factors: low prices, discounts (of up to 90 percent), free shipping and returns, as well as free shipping for those who promote the application on social networks.
Temu explains its competitive strength in part on its website. On a dedicated page, the company boasts that it provides access to "the world's best sellers, manufacturers and brands of all sizes thanks to: [its] ability to find the best products on a global scale, [its] experience in managing complex logistics supply chains" and thanks to its "C2M" (consumer-to-manufacturer) system, which involves direct sales between manufacturer and consumer. According to the company, this process helps vendors to manufacture products in line with consumer preferences and further reduce costs.
Evolution
Temu's presence may be global, but the company is still in the early stages of its evolution.
In December 2022, Temu was the most downloaded free application on the App Store and Google Play in the US, just a few months after its launch.
At the same time, however, the Time website was pointing the finger at the platform's poor reputation for "undelivered packages, mysterious fees, incorrect orders and unresponsive customer service".
In April 2023, the US-China Economic and Security Review Commission (USCC), an independent commission of the US government, communicated in a briefing note on the challenges posed by the Temu and Shein brands. According to the agency, "Temu's lack of affiliation with established brands has raised concerns about product quality, as well as accusations of copyright infringement."
On the other hand PDD Holdings, the parent company, has been accused by China Labor Watch of "excessive overtime", forcing employees to work 380 hours a month. The company faced online protests after several worker deaths in 2021.
In June 2023, according to information reported by media outlet Bloomberg, products manufactured in China's western Xinjiang province were sold to US consumers via online shopping platform Temu. This is a violation of a US law banning goods from the region because of its links with forced labour.
Finally, the USCC recalled that in April 2023, media outlet CNN reported that several cybersecurity teams had found malware on Pinduoduo's mobile app for Google Android devices. This software enabled the Pinduoduo app to bypass users' security permissions and access private messages, or change settings and prevent the app from being uninstalled.
News
In May 2023, Temu's parent company, PDD Holdings, transferred its headquarters from Shanghai to Dublin. Ireland's capital is a preferred location for technology companies due to its business-friendly tax structure, attracting the likes of Apple, Meta and Google.
In July 2023, further black spots were added to the picture. The American media outlet Wired reported copyright infringement and Temu's copying of photos and product descriptions originally posted on Amazon.
In terms of figures, PDD Holdings is doing well. In May 2023, it announced higher financial results for the first quarter ended March 31, 2023. Quarterly revenues amounted to 37,637.1 million renminbi (15,480.4 million US dollars ), an increase of 58 percent in the first quarter of 2022.
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