After launching in the US in Sept 2022, Temu has been aggressive in its global ambition – it has launched into 17 countries, and as of this week, it is topping the App Store chart in almost all the countries it is in.  

This is already bringing very interesting competitive dynamics to global ecommerce: 

  1. Many people think Temu’s most direct competitor is SHEIN. In fact, while Temu did aim at SHEIN during its preparatory days, the platform has actually developed differently thus far, probably unintentionally. According to various sources, the actual overlap of customers between Temu and SHEIN is very small (<10%), but Temu might have accelerated SHEIN’s plan to become a marketplace

2. Temu’s aggressive growth seems to have accelerated Alibaba’s plan of “全托管” (“fully managed” or “all-inclusive”) model. AliExpress started with this model last December and Lazada launched it to cross-border sellers on 25 April. Both AliExpress and Lazada are under Alibaba’s Global Digital Commerce Group

3. Temu might have convinced TikTok Shop to tackle the US market, which they didn’t for a long time. TikTok Shop is already a meaningful player in Southeast Asia (do look out for our upcoming Ecommerce in Southeast Asia report) – but the real prize is the lucrative North American market. Being big in ecommerce in the US will help alleviate the political pressure on TikTok too during the election year. 

4. It is expected that Temu will enter Brazil soon, competing directly against SHEIN, Shopee and Mercado Libre there. Even with a potential 60% ecommerce import tax, Temu’s cross border goods will still be competitive.   

5. Thus far, we’re not quite sure if Amazon understands what Temu is, or takes them seriously enough. However, Amazon’s recent introduction of subsidies (i.e.: 20% off for selected products and customers) is viewed by some observers as a strategic response to the growing influence of Temu. 

Seller responding to Amazon’s latest 20% off subsidies (Source: Amazon Seller Central)

Closer to home, we know that Temu decided in their first steps that Southeast Asia was a less attractive market. Question is, now Temu has got a foothold in more affluent markets, and Shopee has demonstrated that profit is possible in this region, will Temu join the fight here against Shopee, Lazada and TikTok Shop?


More insights

We are launching ourEcommerce in Southeast Asia 2023 report” this 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. 

Stay tuned! 

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].

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].