The rise of the Chinese shopping app Temu has been nothing short of remarkable, with it now surpassing Amazon’s popularity in several countries. Offering a wide range of everyday items at incredibly low prices, Temu has captured the attention of global consumers. Launched by Shanghai-based company PDD Holdings, the platform’s total sales value has skyrocketed from $3 million to $400 million in just a few months, making it the most popular free iPhone app in countries like the US, UK, Australia, and Germany.
So, what’s behind Temu’s immense success? Let’s delve into some of the strategies that have propelled it to the top, while also recognizing that using the platform is not without its risks and potential downsides.
Secrets to Temu’s Success:
- Value for Money: Despite the common association of “made in China” with cheap and low-quality products, Temu has managed to change this perception. Consumers now see it as a source of affordable items that don’t compromise on quality. In some instances, you can purchase 10-20 products for as little as $20-30. Temu attributes these prices to its streamlined supply chain, eliminating middlemen and efficiently handling everything from customs processing to international shipping. However, questions have arisen about whether Temu and its suppliers are operating at a loss, a common scenario for startups heavily investing in marketing and competitive pricing to gain brand recognition.
- Effective Marketing: Unlike traditional e-commerce platforms that focus on functional benefits like cost savings, Temu taps into consumers’ emotional needs. It creates an aspirational shopping experience by encouraging users to “shop like a billionaire.” This approach aligns with its value-oriented strategy. Temu entered the market at a time when global inflation was a concern, leading consumers to seek value. In its initial month in the US, Temu invested $200 million in advertising and planned a $2 billion budget for the year. Additionally, it’s capitalizing on China’s expertise in influencer marketing by recruiting social media influencers, suggesting a potential shift toward a social-commerce strategy.
Sales Promotion Tactics:
Temu employs a wide range of sales promotion tactics, making it an engaging shopping experience. Some of these tactics include gamified experiences, lightning deals, limited-time offers, discounts, free shipping, loyalty programs, search engine marketing, and an AI-powered recommendation system. These strategies create a sense of excitement and urgency, encouraging users to make purchases.
However, consumers should exercise caution and self-awareness when using platforms like Temu. The abundance of marketing tactics can lead to overconsumption, environmental waste, and post-purchase regret. It’s essential to assess your actual needs and understand the promotional strategies being employed. Teaching advertising awareness and coping strategies in educational programs or social marketing campaigns could help consumers make more informed decisions in the era of gamified advertising.
In summary, while Temu offers significant value to consumers, its rapid success comes with a caveat. Shoppers should be aware of the marketing tactics in play and consider their real needs before making purchases. Additionally, educational initiatives could empower consumers to navigate the world of online shopping more effectively.