What: Coresight analyses the Temu phenomenon

Why it is important: Is Temu the new Shein?

Temu is a fast-growing cross-border e-commerce marketplace launched in the US in September 2022 by Chinese company PDD Holdings. It offers ultra-low prices on a wide assortment of merchandise sourced mainly from China.

Temu has seen rapid growth in active users, reaching over 100 million by May 2023, aided by aggressive marketing campaigns. Brand awareness of Temu among US consumers jumped from 48% in February 2023 to 69% in August 2023.

Top ways US consumers discover Temu are social media, online ads, and word of mouth. But the percent of US consumers who say they would purchase from Temu has dropped, despite the low prices.

Top concerns about Temu are lack of supply chain transparency, data privacy, and its Chinese ownership.

Its growth poses a challenge to retailers like Amazon, Shein, Five Below that rely on low prices and young consumers but Temu has reputational issues to overcome related to product quality, data protection, and social responsibility.

Temu growth and challenges in the US, 6 months after