On Saturday (26 August 2023), Temu quietly launched into the Philippines. With this, the long-rumoured Temu entry into Southeast Asia has finally started.
Just like Temu’s other launches, the Philippine entry was coupled with up to 90% discounts plus free shipping and free returns for the consumers. We took a brief view of the product selection, which seems to be somewhat differentiated from what you usually see on Shopee and Lazada.
The choice of the Philippines as the first port of entry could be due to a few factors: already sophisticated (and tested) cross border fulfilment infrastructure, and the ability to use only the English language on the site. Philippines is the 3rd largest ecommerce market in Southeast Asia by GMV in 2022.
With TikTok Shop’s aggressive expansion and Temu’s entry, the landscape of ecommerce platforms in Southeast Asia has been disrupted.
Although for now Temu seems to be mainly targeting SHEIN (which has been doing well in Thailand and the Philippines), Southeast Asia’s incumbent marketplaces Shopee and Lazada probably need to take strong measures to defend their market leadership. The user and product categories will eventually converge if Temu’s ambition is like that of TikTok Shop – to strike it big.
Consumers are likely to be the biggest beneficiaries of this renewed competition. In Momentum Works’ “Ecommerce Platforms in Southeast Asia 2023” report, we projected that Temu’s entry would stimulate overall growth in Southeast Asia’s ecommerce market. TikTok Shop has already led the way by bringing a lot of beauty and cosmetic purchases online (from offline).
With the Philippines, Temu is now available in 38 countries worldwide. It is said that launches to a few other countries in Southeast Asia will take place sequentially, and potentially ‘very soon’.
For more insights about Temu and the team behind it, you can refer to Momentum Works’ “Who is Temu” report.