Temu looked desolate when it first launched, but it now adds thousands of new products each day, the company claims. Rui Ma, an investor and analyst who founded Tech Buzz China, a podcast and investor community, says the store has evolved at “China speed”—the kind of fast-iteration and growth Chinese companies are known for, and that US companies can struggle to keep up with. “I think it’s offering a pretty good customer experience,” she says. “I’ve ordered from there three times already.” Her haul includes household items, and those dazzlingly cheap Lenovo headphones, which are among Temu’s top sellers.
Temu may be artificially tempting right now. It offers free shipping with no minimum purchase and widespread 30 percent discounts, but Pinduoduo could be subsidizing early customers in a bid to gain word of mouth. “The question for investors would be, how profitable is this?” Ma says.
Pinduoduo, one of the biggest online shopping sites in China, can afford to invest in a swing for US customers. The company, which did not respond to interview requests, listed on the Nasdaq stock exchange in 2018 and reported nearly $15 billion in revenue in 2021. In China, Pinduoduo allows companies—including farmers—to sell directly to consumers through a popular mobile app very different from those offered by US retailers. It includes gaming and social components, such as shopping via livestream. A popular group buying feature lets friends band together to get a product for an ultra-low price. But the company’s success in China is built on a logistics network of warehouses and delivery partners.
Winning the loyalty of US shoppers who have many other, more familiar options will be one of Temu’s greatest challenges, says retail marketing consultant Cathy Hotka. Its low prices appear to be winning converts, but they also come with a risk of blowback over poor quality and inaccurate sizing, she says.
Previous attempts to crack US ecommerce from China have met limited success. AliExpress, from Alibaba, a giant in China, has failed to gain much traction and was flagged by the Office of the US Trade Representative for selling counterfeit goods. Wish, a US ecommerce site that features many Chinese vendors, has struggled with quality control and shipping issues. Shein has been successful in fast fashion but has also drawn criticism for the environmental impact of clothes so cheap as to be almost disposable.
Temu’s website says it “will offset carbon emissions from every delivery” and prominently displays its intellectual property policy—but it’s too early to gauge the company’s commitment to sustainability and copyright law. Ma says that within China, Pinduoduo used to be known as a purveyor of cheap, low-quality goods, but it has recently transformed its image and is now known for sustainability initiatives and efforts to help farmers.
WIRED went shopping on Temu earlier this week, surfing its mesmerizing but haphazard selection. After the introductory discounts were applied, a shopping cart comprising a five-pack of kitchen sponges, a hair catcher for a bathroom sink, two flamingo-print mouse pads, a mini humidifier, a stainless steel sink strainer, and a two-piece satin pajama set came to just $13.97.
