Temu taps US consumer mood

With half of Americans saying they feel worse off than they did a year ago, the recent success of cut-price online shopping platform Temu shouldn’t come as a surprise.

Short-term marketing success

Temu, based in Boston but owned by multinational commerce group PDD Holdings, offers consumers low prices on everything from home goods to apparel to electronics. 

• It only entered the US last September and made waves earlier this month by running two 30-second ad slots during the Super Bowl at a reported cost of $14m. 
• Those ads sparked an instant 45% jump in downloads of the Temu app and a 20% increase in daily active users. It now has more than 24 million downloads in the US and is moving into Canada. “We did see a significant surge in visitors to the Temu marketplace site as well as app downloads both during and after the game and the interest remains elevated,” the company said in a statement.

• The ads complemented ongoing direct marketing efforts and a user referral program that offers spending credit on the app to existing users when they recruit new people. 

Evolution needed for the longer term 

While it has proved successful at acquiring new users, that won’t be enough for long-term success, observers say. “It has not yet established itself as offering a unique product selection or unique customer experience,” Juozas Kaziukėnas, founder and CEO of Marketplace Pulse, told ModernRetail. 

He added that while the “pretty basic app” will evolve, the value proposition is based on China (something it shares with Shein and AliExpress) “which is not enough in modern retail – you have to do more”.

Final thought 

The same Gallup poll that found 50% of Americans feel worse off now than they did 12 months ago also reported that 60% expect to be better off a year from now. That sentiment could stall Temu’s growth, especially if quality issues arise and the products it’s selling turn out to be too cheap to be any good. 

Sourced from Modern Retail, Gallup