Temu has taken the global ecommerce market by storm. Many of you might already know that Temu was reaching US$ 400 million of monthly sales in the United States in April, barely 8 months since its launch in September 2022.
In the meantime, Temu started to implement a much wider ambition, extending its app to … 17 countries by the latest count.
Here is the list: Australia, Austria, Belgium, Canada, France, Germany, Italy, Mexico, Netherlands, New Zealand, Poland, Portugal, Spain, Sweden, Switzerland, UK, US.
In other words, all the 3 big countries in North America, 11 countries in Europe, as well as Australia/New Zealand.
Temu has obviously committed a lot of investments in these countries – it is now ranked number 1 in the Shopping category (and sometimes overall) on the App Store in most of the 17 countries:
Temu’s ranking in App Store in 10 countries (Source: data.ai)
Perhaps they are single-handedly keeping the growth of major internet advertising platforms such as Google and Facebook?
Many have asked the question – does Temu have enough money to pay?
Its parent, PDD Holdings, is profitable with its Pinduoduo platform in China. In FY2022, PDD Holdings generated a free cash flow of US$ 7 billion; whilst in Q1 2023, when Temu was already in full swing, PDD Holdings still generated a net income of US$ 1.2 billion.
With Pinduoduo already being profitable and having a free cash flow of US$ 7 billion in FY 2022, they most probably can.
Pinduoduo’s free cash flow (Source: Moomoo)
A few of these markets saw Shopee’s entry in 2021 – France, Mexico, Poland, and Spain. The Singapore-based ecommerce platform has subsequently withdrawn from all these markets.
Does it mean Europe and North America are bad markets for ecommerce platforms focused on selection and savings, or was the withdrawal due to Shopee’s own problems?
Temu seems to think it is the latter.
We are launching our “Ecommerce in Southeast Asia 2023 report” next week, where we will decipher how Temu has impacted Shopee, Lazada and other platforms in Southeast Asia, and how the endgame of the ecommerce landscape in the region will take shape.
Meanwhile, you can refer to Momentum Works’ “Who is Temu” report for structured analysis and insights about the company and read our book “Seeing the unseen: behind Chinese tech giants’ global venturing” for more case studies, analyses, and reflections.
Momentum Academy has conducted a number of sharings and workshops on Pinduoduo / Temu’s culture, its key success factors, people and organisation practices. If you are interested in bringing such learnings to your organisation, please contact [email protected].