In just two years since launch in September 2022, Temu has surged to become the world’s second most-visited e-commerce website, according to data from Similarweb. Shoppers spend an average of five minutes per visit to Temu and on each visit, users view seven pages on average.
More recent research from Roy Morgan showed Temu’s monthly shoppers grew by 32% from 1.26 million in the October to December 2023 quarter to 1.66 million in the April to June 2024 quarter. Among these, 80% are repeat shoppers, with close to half (48%) making purchases four or more times over the past year.
Temu shared insights with Retailbiz into how the e-commerce giant is setting new standards in shopping culture and bringing affordable innovation to the masses.
‘Direct from factory’ business model
“Temu is an online marketplace that practises a direct-from-factory model. We are best known for streamlining the supply chain to cut out unnecessary expenses and markups to deliver affordable quality products that cater to the needs of our diverse customers and their varied needs,” a Temu spokesperson told Retailbiz.
“What sets Temu apart is our ability to offer competitive prices by connecting consumers directly with manufacturers, eliminating multiple intermediaries and associated costs. An individual can shop at wholesale prices typically reserved for bulk buyers. This direct-from-factory approach expands options for affordable shopping.
“When we first launched in September 2022 in the US, we offered a model often referred to as ‘fully managed’. In this model, Temu oversees the logistics, customer service, and other functions on behalf of the sellers, who only need to deliver their products to designated logistics facilities to be inspected, sorted, packaged and then dispatched.
“As we progressed, we began offering qualified sellers in some markets the option of a ‘semi-managed’ model, where the merchant handles the logistics and returns process for merchandise stored in local warehouses. Currently, this model is available in the US, UK, selected European countries, Australia, and Japan. This model expands the range of merchandise that Temu offers and reduces delivery times.”
Combination of quality and price drive success
Temu believes its popularity is driven by the combination of quality and price, due to its ability to streamline the multiple stages between production and sale, which add costs that are passed onto consumers.
“By connecting customers directly with manufacturers, this approach ensures that quality products are accessible at affordable prices, resonating with consumers who seek to maximise their purchasing power,” the Temu spokesperson said.
“For sellers on our platform, those who deliver a competitive blend of price and quality are rewarded with increased sales and the opportunity to reach new markets and customers. This profitability supports reinvestment in research and development, driving ongoing product innovation and improvement.
“Product quality and consumer safety are top priorities at Temu. To maintain high standards while offering competitive prices, we require all merchants on our platform to meet strict safety and quality requirements.”
The company’s quality control measures include requiring proper documentation, conducting spot checks, and proactively monitoring product listings to ensure compliance.
“We also act swiftly on customer feedback, removing non-compliant products and addressing issues as they arise. Through Temu’s Buyer Protection Program, customers can apply for a refund within 90 days of purchase if products are damaged or not as described, ensuring peace of mind.”
Data security and customer privacy
At Temu, protecting the user’s data is a core principle.
“We are upfront about how we use data to run our platform and improve the user experience. We collect the minimum information necessary to manage and complete orders, deliver services and process payments, and communicate with the user about their orders, our products, and offers that might interest them,” the Temu spokesperson said.
“We are certified by a Google-approved lab to meet the Mobile Application Security Assessment benchmark for data security and run a bug bounty program with HackerOne to identify and address vulnerabilities.
“Temu is also part of the Anti-Phishing Working Group, helping to combat online phishing and identity theft. Our payment links are encrypted to meet Payment Card Industry Data Security Standards (PCI DSS), and we partner with major international payment providers to secure transactions. Two-factor authentication adds further protection against unauthorised access.”
Future vision for the Temu brand
Since entering the Australian market in March 2023, Temu says it has actively listened to feedback from stakeholders and adapted its offerings to better meet consumer needs.
“Earlier this year, we empowered qualified sellers to manage their logistics and ship products directly from local warehouses in Australia, which expanded our product range and significantly reduced delivery times,” the Temu spokesperson said.
“Looking ahead, our vision is to continue evolving and growing to offer more value-for-money products. Our goal remains to democratise access to affordable, high-quality goods, ensuring people from all walks of life can fulfil their needs and aspirations, regardless of their financial background.”