How Temu is Shaping the Next Wave of E-Commerce

by Maria Williams

Temu (pronounced tee-moo), a pure e-commerce platform that powers individualization and just-in-time manufacturing, is on a mission to promote a new and better way of online shopping. While e-commerce to date has made it more convenient and cost-effective for consumers to discover a wider selection of merchandise, Temu leads the next era of online shopping by going beyond removing middlemen or squeezing more efficiency out of the manufacturing supply chain. Indeed, a shift toward consumer demand-driven e-commerce is already taking place. Whereas previously brands manufactured products and then marketed them to consumers through advertising, manufacturers are now increasingly producing to the specifications of consumers. These consumers now have the means to telegraph their requirements through a platform like Temu and have them fulfilled by a worldwide roster of suppliers: customization at scale.

“Temu is positioning itself at the forefront of the next era of e-commerce, which we believe will move beyond disintermediating or optimizing the manufacturing supply chain, into matching individualized needs and wants with global resources and delivering them efficiently,” said a Temu spokesman. “This shift will lead to the creation of legions of new businesses, and Temu is prepared to support and enable them.”

Temu has Strong Backing
Launched in September 2022, Temu is headquartered in Boston’s Back Bay neighborhood. It is the latest venture by PDD Holdings, a Nasdaq-listed multinational commerce group that owns and operates a portfolio of businesses including Pinduoduo, the social company that Goldman Sachs called “the fastest-growing internet company in the world.” This backing by a $100 billion market cap company with deep pockets and operational know-how has helped turbocharged Temu’s expansion in the U.S. PDD Holdings’ experience in serving 900 million users worldwide and handling 61 billion annual orders has also helped Temu avoid some of the common pitfalls associated with e-commerce startups.

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Millions of consumers have downloaded the Temu apps or visited its website to shop, attracted by its affordability, customer service, and reliable deliveries.

Customers are Satisfied with Temu
Naira Zargarian, a Temu shopper, said she was initially hesitant because the prices sounded “too good to be true” but quickly became a convert once she saw the quality of the products and speed of delivery. “I was a little skeptical about the company as it sounded too good to be true, but decided to take a chance,” Zargarian wrote in a review on the Trustpilot site. “To my total surprise, not only was it a great deal and good quality, it also came super fast; literally within a few days. Definitely, ordering again.” Another happy customer, Valencia Miller, was similarly wowed by the wide selection of affordable quality products. “Ive received several items from Temu and was pleasantly surprised! The shipping time was very fast. I received my items in about a week and the quality was great!” said Miller in a Trustpilot review. “Free shipping and coupons on top of their already low prices. Thanks TEMU for an excellent shopping experience!”

Temu’s Interests Aligned with Consumers and Sellers
As a pure online marketplace or platform, Temu’s interests are also aligned with both consumers and sellers. Without its own brands, Temu does not compete with the merchants its hosts in selling products to the same consumers. Quite the opposite, Temu provides consumer data insights to its sellers to help them better match their products to consumer needs when and where they need them. The pure e-commerce platform model differentiates Temu from other players such as Shein and Amazon, and the use of advanced technology has enabled companies, especially rising stars in e-commerce marketplaces like Temu, to flourish.By connecting sellers directly to consumers, the sellers can increase their reach and exposure to their target customers, improve their product offerings and customer satisfaction, as well as make more effective, informed internal and external company decisions.

Temu’s Reverse Manufacturing Process
For instance, Temus Next-Gen Manufacturing program is designed for medium to large-scale manufacturers and is aimed at improving business decision-making by enabling manufacturers to more accurately align their designs, production, and inventory with consumer demand. By providing manufacturers with a better understanding of what consumers want and need, the program helps optimize design, production, inventory, and branding decisions. At the same time, Temu is helping small business owners connect with end users more efficiently and affordably. Through Temu, small business owners can present their products in various forms, such as photos and videos, and offer tailored options to customers through chat options.

What is next for Temu?
What does this more consumer-led e-commerce experience mean for Temu customers moving forward? It is a path of greater empowerment of customer value – giving them even more of what they want when they want it, and how they want it. As Chen Lei, CEO of PDD Holdings, put it: “We fully respect that there are manydifferences across different markets. And we also understand the need to constantly experiment, and we expect that the process will be full of challenges.” “We will be patient and work together with our partners to create long-term value for consumers,” he added.

Presented by: Maria Willaims

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