Temu is the “sister company” of Chinese e-commerce giant Pinduoduo. Launched in September 2022, the multi-segment marketplace has quickly become a household name in e-commerce.
beginning
Temu was first launched in the US by PDD Holdings, the parent company of Pinduoduo (a Chinese company founded in 2015). The platform and mobile app were then made available in the UK, Spain, Italy, France and the Netherlands in 2023.
Temu offers a number of segments, including fashion items. It is also possible to buy unbranded products in the household, toys and electronics categories.
The platform’s success is due to a number of factors: low prices, discounts (up to 90 percent), free shipping and returns, and free shipping for those who promote the application on social networks.
Temu partly explains its competitive strength on its website: On a dedicated page, the company boasts that it has access to “the world’s best sellers, manufacturers and brands of all sizes [seiner] ability to find the best products on a global scale, [seiner] Experience in managing complex logistics supply chains” and thanks to its ‘C2M’ (consumer-to-manufacturer) system, which involves direct sales between manufacturers and consumers.
According to the company, this process helps providers create products according to consumer preferences, further reducing costs.
Development
While Temu has a global presence, the company is still in the early stages of development. As of December 2022, Temu was the most downloaded free application on the App Store and Google Play in the US, just a few months after its launch.
At the same time, however, the Time website pointed out the platform’s bad reputation, which it had built on “undelivered packages, mysterious charges, wrong orders and unresponsive customer service”.
In April 2023, the US-China Economic and Security Review Commission (USCC), an independent US government commission, issued a briefing note on the challenges posed by the Temu and Shein brands. According to the agency, “Temu’s lack of affiliation with established brands has led to concerns about product quality, as well as allegations of copyright infringement.”
On the other hand, parent company PDD Holdings has been accused by China Labor Watch of working “excessive overtime” and forcing workers to work 380 hours a month. The company faced online protests after several workers died in 2021.
In June 2023, according to information from the media company Bloomberg, products manufactured in China’s western province of Xinjiang were sold to US consumers via the online shopping platform Temu. This is in violation of a US law that bans locally sourced goods because of their links to forced labor.
Finally, the USCC recalled that in April 2023, media outlet CNN reported that several cybersecurity teams had found malware in Pinduoduo’s mobile app for Google Android devices. This software allowed the Pinduoduo app to bypass users’ security permissions and access private messages or change settings and prevent the app from being uninstalled.
news
In May 2023, Temu’s parent company PDD Holdings relocated its Headquarters from Shanghai to Dublin. The Irish capital is a preferred location for tech companies due to its business-friendly tax structure, attracting the likes of Apple, Meta and Google.
In July 2023, Temus’ image took further damage when US media outlet Wired reported copyright infringement and Temus’ takeover of photos and product descriptions originally published on Amazon.
In terms of numbers, PDD Holdings is doing well. In May 2023, the Company reported higher financial results for the first quarter ended March 31, 2023. Quarterly revenue was 37,637.1 million yuan, up 58 percent from the first quarter of 2022.
This article originally appeared on FashionUnited.FR. Translated from English and edited by Simone Preuss.
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