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Top line
You may have seen a Super Bowl ad or Gathering catch on TikTok as part of an aggressive marketing effort for a company you want to “shop like a billionaire,” generate millions of downloads—and mixed reactions from customers.
The Boston-based Chinese-owned retailer is owned by PDD Holdings Inc. (Photo credits must read … [+]
Key facts
Temu is an online retailer that launched in the United States in September, offering incredibly low prices and a broad catalog of items ranging from clothing to electronics to musical instruments.
The retailer’s main selling point is its inexpensive products: This weekend, Meet website prominently featuring “Presidents Day sale from $0.39” and “up to 90% off” sale, with options including men’s running shoes for under $10 and a drill brush set for $6.
The Boston-based Chinese-owned retailer is owned by PDD Holdings Inc., which also operates Temu’s sister company, Chinese e-commerce platform Pinduoduo.
This app is ranked No. 1 in the Apple app store for most of 2023helped by Super Bowl ads, which boasted how customers could “shop like a billionaire”, and endorsements of celebrities such as Jason Derulo and JuJu Smith-Schuster, as well as advertising campaigns on Instagram, Facebook, and Snapchat that TechCrunch compared to TikTok’s successful marketing approach.
Gathering is also enjoying exposure on TikTok: The hashtag #ago has over 300 million views and consists of many “Meet hauls”, where users take advantage of low prices to buy and unbox items in the camera.
Temu has also increased its appeal and its social media profile through games that can earn customer credit for items as well as referral codes (many TikTok videos tagged #met are flooded with commenters eager for discounts, asking “code for code?”).
Temu claims it keeps prices low by “cutting out the middleman” – allowing Chinese vendors to sell directly to American consumers and ship directly from China instead of a network of US warehouses, Cable reported.
But Temu only has a 1.8/5 star rating from 84 customer reviews on the site Better Business Bureau website along with 120 complaints, many of which stated the product never arrived, the product was delivered with damage and the customer service was slow or unhelpful.
Just five months after release, the app is in place downloaded about 24 million times.
Key Background
Temu utilizes well-oiled engines from its sister company Pinduoduo, which has been in operation since 2015 and made Temu’s supply chain model follows cutting intermediary costs, shipping directly from China. But Pinduoduo also has unhappy customers: Report that counterfeit products had been sold through Pinduoduo sparked an investigation by Chinese regulators in 2018. At response, the company closed more than 1,000 stores, removed more than 4 million product listings, and blocked 450,000 suspected counterfeits from appearing on its platform. In 2019, the Office of the US Trade Representative placed Pinduoduo is in the list of “famous marketplaces” due to failed counterfeiting and piracy. The US government has also cracked down on Chinese-owned apps in recent months, with several lawmakers pushing to ban TikTok and other Chinese-owned apps and businesses over national security and data privacy concerns.
Important Quotes
“Through the widest possible stages, we want to share with our consumers that they can shop with a sense of freedom because of the prices we offer,” said a spokesperson for Temu. CNN about the “shop like a billionaire” motto.
Big Numbers
$10 million. That’s the total value of money and prizes that Temu gave out in “Shake & Wina sweepstakes campaign designed to raise its profile. Big giveaways are part of a huge social media push Meet: Sharing sweepstakes on social media and referring friends and family members count as submissions.
Tangent
Intersection’s low prices and wide range of products have drawn comparisons with Shein, a popular fast fashion online retailer. “Temu and Shein disrupted the boring US e-commerce market more than anyone else,” Juozas Kaziukenas, founder of e-commerce research firm Marketplace Pulse, told Washington Post. Shein has become one of the most popular and visible clothing brands in the world, reaching $100 billion sale in 2022 and attract consumers through low prices and influencer marketing. Shein, however, has criticized to sell products made in workshops with unsafe working conditions, some of which work 17 hour days and are docked to pay if the garment has a fault. Like many fast fashion retailers, Shein has also faced criticism for its environmental impact; he promised to reduce supply chain emissions by 25% by 2030. The quality Shein’s outfits are notorious (and potentially contain dangerous chemicals, such as lead), although consumers who buy clothing tend to want to chase trends rather than buy clothing that is sustainable and durable. The company has also come under fire several times for allegedly copying clothing designs created by independent artists and small businesses.
Further reading
An online shopping startup that has quietly become the number one app in the US (CNN)
How Retail App Meet Attracts US Shoppers With Amazing Prices (Cable)
The Truth About Dating, America’s New Most Downloaded App (TIME)
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Sources 2/ https://www.forbes.com/sites/conormurray/2023/02/17/what-to-know-about-temu-new-chinese-owned-fast-fashion-app-draws-comparisons-good-and-bad-to-shein/ The mention sources can contact us to remove/changing this article |
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