A new online shopping platform linked to one of China’s leading retailers has quickly become the most downloaded app in the United States, surpassing Amazon and Walmart.
Temu, an online retailer based in Boston, which shares ownership with the Chinese social commerce giant Pinduoduo, is capturing the American consumer market.
The superstore sells everything from home goods to clothing and electronics. All at super cheap prices, which consumers are already accustomed to finding at another Chinese giant, Shein.
Last Sunday, Temu debuted a commercial during the Superbowl. The ad encourages people to “shop like a billionaire.”
“We want to share with our consumers that they can shop with a sense of freedom because of the prices we offer,” a Temu spokesperson told CNN in a statement.
A women’s swimsuit on Temu costs $6.50, while a pair of wireless headphones costs $8.50. An eyebrow trimmer costs 90 cents.
These super low prices – at least by Western standards – have led to comparisons with Shein, the Chinese fast-fashion newcomer that also offers a wide selection of cheap clothing and household items. Additionally, the American discount retailer Wish and Alibaba’s AliExpress are also competitors of the new store.
Too good to be true?
Temu benefits from the vast and deep network of contacts of its parent company, Pinduoduo, one of the most popular e-commerce platforms in China, with approximately 900 million users. This company made its name with a group buying business model, allowing consumers to save money by recruiting friends to buy the same item in large quantities.
Since its launch in September, Temu’s app has been downloaded 24 million times, accumulating over 11 million monthly active users, according to Sensor Tower. In the fourth quarter of last year, app installations in the U.S. for Temu exceeded those of Amazon (AMZN), Walmart (WMT), and Target (TGT).
But will Temu be able to maintain its rock-bottom prices in the long term? For now, the company benefits from having launched amid extremely high inflation in the U.S., that is, precisely when consumers are looking to save and cut costs at all costs.
Source: CNN