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How Temu is shaking up the online shopping world – It's 'Amazon on steroids', says analyst

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Πoς η Temu προκαλε αναταραχor στον κoσμο των online αγορo&nu ; – Εiναι «το Amazon σε στεροειδor», λeει α&nu ;αλυτorς

The slogan 'shop like a billionaire' has skyrocketed her popularity

A record 123 million Americans watched this year's Super Bowl. But aside from the country's biggest sporting event, a stunning halftime and several shots of Taylor Swift in the stands, viewers also saw six 30-second ads for Temu– a Chinese-owned e-commerce company.

The shopping giant has been criticizedby politicians in the UK and the US. A US government investigation found there is an “extremely high risk” that products sold at Temu were made with forced labor.

Temu says it “strictly prohibits” the use of forced, penal or child labor by all its merchants.

The company, which sells everything, from clothing to electronics and furniture, first launched in the US in 2022 and later in the UK and the rest of the world. Since then, it has consistently topped the global app download charts, with just under 152 million Americans using it each month, according to data compiled by SimilarWeb.

It's 'Amazon on steroids' , says retail analyst Neil Saunders, according to the BBC, and with the slogan “shop like a billionaire” it has skyrocketed in popularity by shipping to around 50 countries worldwide.

A typical 30-second Super Bowl ad costs about $7 million, and during this year's event, Temu ran six such ads.

“That's a lot of money for a very short ad,” Saunders says. “But a huge number of people are watching it and we know that after this commercial Temu's downloads will skyrocket,” he adds.

SimilarWeb data shows unique visitors to the platform worldwide increased by nearly a quarter on Super Bowl Day compared to the previous Sunday, with 8.2 million people browsing the website and app. During the same period, visitors to Amazon and Ebay dropped by 5% and 2% respectively.

“They have also spent a lot of money on micro-marketing, getting influencers to promote products and to suggest buying things on the platform through channels like TikTok and YouTube,” says Saunders.

These influencers typically have fewer than 10,000 followers, according to Ines Durand, e-commerce expert at SimilarWeb. “Micro-influencers have strong communities, so their endorsement means a strong trust in these products,” she explains.

Temu is owned by Chinese giant Pinduoduo Holdings, “a monster in Chinese e-commerce.” , according to Sean Raine, founder of China Market Research Group. “Across China, everyone buys products from Pinduoduo, from speakers to T-shirts or socks,” he says.

“Temu uses an amazing system based on heavy data collection at scale,” says Durant. “They collect data about consumer trends, products that are searched for and clicked on the most, which they give to individual manufacturers.” Durand says that while Amazon sells this data to manufacturers for a high price , Temu gives them away for free to producers – information they use to “test the market” with a relatively small number of products.

Πoς η Temu προκαλεi α ναταραχor στον κoσμο των online αγορoν &ndash ΕΙναι «το Amazon σε στεροειδor», λεει ανα λυτor&sigmaf?

The platform often uses AI-generated imagery to stay on top of the latest trends, so the product being sold may not yet exist, according to Durant. They are then shipped by air. “This means that products do not need to be stored. They don't have to go to warehouses once they're shipped by plane, they go straight to the customer,” he notes.

A third of packages arriving in the US last year under a shipping “loophole” known as the de minimis threshold were from Temu and competitor Shein, according to a US congressional report. Many countries – including the UK and US – have a de minimis threshold, which is designed to help citizens import goods.

So, as Temu's products are shipped directly from factories, “cutting out” the middlemen, they become virtually duty-free, as the BBC notes.

However, there may be more regulation on the horizon to close the “loopholes” » in shipping, according to Mickey Diaz, CEO of global freight forwarding company Unique Logistics.

However, analysts expect further expansion for Temu.

“We will probably see groups start to round out its offering more, perhaps pushing some products at slightly higher prices,” predicts retail analyst Neil Saunders.

< p>According to Sean Reid, the focus will be on getting an even bigger share of the market.

“For the next two to three years, their strategy is just to increase brand awareness and market share. They don't care about profits. This is exactly what happened with Pinduoduo when it started in China. They gave incredibly cheap offers, just to grab market share”.

source: newsbeast.gr/By Iulia Kileri

Source: 24h.com.cy

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