As financial uncertainty looms over the U.S., it’s no wonder that many households are tightening their belts. At the same time, some astute shoppers are questioning whether the prices on their branded goods are worth it.
Temu, a newcomer to the e-commerce scene, is empowering customers with a fresh approach to online shopping. Launched in September 2022, the company appeals to value-seeking consumers from all walks of life.
In a highly volatile market, it’s not just lower-income households concerned about money. Higher taxes and rising interest rates have hit consumers hard. Household expenses are set to increase, with the Energy Information Administration (EIA) predicting that the price of electricity will increase roughly twofold this year.
Temu has drawn interest from consumers who want to enjoy shopping without worrying about their bank balances. It will be entering a market dominated by Amazon, the biggest e-commerce market operator. Temu will also be vying for wallet share with traditional retailers like Walmart and Costco.
But it may yet have a competitive edge. Temu uses innovation to remove extra costs from excess inventory or mismatches in supply and demand. Even more importantly, it has access to a vast network of global suppliers and fulfilment partners, thanks to a sister e-commerce platform under Nasdaq-listed company PDD.
Over the years, the e-commerce platform has worked with more than 11 million merchants and handled 61 billion orders in 2021, giving it a deep experience in sourcing and fulfilling orders.
A closer look at the products offered on Temu show that most of the merchandise is unbranded. But does this have any effect on quality?
Sunglasses, cosmetics, and sportswear – same thing, different label
Marketing student Laura Hoffman from Charlotte, NC bought a pricey pair of sunglasses on credit, despite losing them four days after purchase. She admits to buying them hastily.
“I feel a little foolish for investing so much on something so disposable. I could have had a vacation with that money,” she said.
She recently snapped up a few pairs of $0.99 sunglasses from Temu and is happy with them.
The same goes for cosmetics. A comparison of matte liquid lipstick, on sale on Temu for $3.29 for a set of six, lists the same active ingredients as a well-known luxury brand, where just one lipstick retails at $20.99. Both products are hypoallergenic, silicon free, vegan, and contain vitamin C, yet one is over six times the price of the other.
Weightlifter Drew Turner from Boulder City, NV has always bought inexpensive sportswear because it allows him more choice. He recently ordered a pair of $5.99 sneakers from Temu. By cutting costs, he can enter more competitions.
“Expensive clothes don’t make me stronger! Besides, there’s no way people in my gym would be impressed by a brand across my tee,” he said. “I’m confident enough in myself to know that a logo doesn’t matter.”
As well as clothes, accessories, and makeup, Temu features electronics, industrial equipment, homeware, pet supplies, jewelry, and baby products.
For now, Temu only ships to the U.S. But who knows, the rest of the world might not have to wait too long.