Love it or hate it, you have to admit Temu had a banger year. Launched in late 2022, the Chinese-owned ecommerce site, known for selling a vast array of astonishingly affordable goods, took only two years to become a household name in the US. Over the past 12 months, it has topped download charts, surpassing other viral apps like ChatGPT and Threads, and now operates in dozens of countries around the world. Even its biggest rival, Amazon, recently introduced a Temu clone called Amazon Haul that closely resembles the original, both in terms of its logistics supply chain and user interface.
Temu is projected to earn more than $50 billion in total sales this year, according to analysts from AB Bernstein and Tech Buzz China, potentially tripling its 2023 figure. Temu’s website now gets nearly 700 million visits worldwide every month, and Apple recently revealed it was the most downloaded app of 2024 on iPhones in the US.
Temu has now fully replaced Wish, an earlier bargain online shopping site, in the cultural lexicon as the signifier of knockoffs or budget-friendly alternatives. The winner of the recent Timothée Chalamet lookalike contest in New York City, for example, calls himself “Temu-thée Chalamet.” Tens of millions of ordinary people have tried out the app, many of whom learned about it through one of Temu’s seemingly unavoidable and relentless advertising campaigns. At this point, your grandma is probably obsessed with Temu, too.
“My friends and family members who didn’t know what it was in 2023 do now,” says Moira Weigel, an assistant professor at Harvard University who studies transnational online marketplaces. “Random relatives who know that I study China or ecommerce will say, ‘Oh, you must know all about Temu,’ in a way that didn’t happen a year ago.”
Weigel says that Temu has done a few things right, including identifying the correct suppliers in China, targeting appropriate customer segments, and finding an inexpensive way to ship products from one to the other. That allowed the shopping platform to defy early analyst predictions that it would quickly burn through its cash reserves and flame out.
Temu, which is owned by PDD, one of the biggest ecommerce giants in China, is moving and pivoting at a speed that its Western counterparts can’t really grasp, says Juozas Kaziukėnas, founder of the ecommerce intelligence firm Marketplace Pulse. “When you look at a company like Temu, it’s going a thousand miles an hour,” he says.
Kaziukėnas believes the most important thing Temu did this year was quickly switch its focus away from shipping small packages through air cargo and start building local inventory supply chains in the US and other countries. “This year, it started with 100 percent of goods coming from China; now in the US, 50 percent of them are coming from local warehouses. For Western marketplaces, these types of changes would have taken years,” Kaziukėnas says.
Still, Temu does not have a shortage of looming challenges. In the US, the Biden administration is eager to dismantle a tariff exemption rule that critics say unfairly benefits Temu before it leaves the White House. In Europe, Temu is under formal investigation for allegedly selling illegal products and getting users addicted to its app. The company is also often criticized around the world for its negative environmental impact, labor practices, and alleged misuse of user data, including allegations from researchers in the US that the app poses a national security risk.
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