Temu, an online marketplace boasting heavily discounted products has officially launched in Australia as part of its global expansion.
Temu, an online marketplace rivalling Shein with its quick factory to consumer turnaround and low prices, has officially launched in Australia
The ecommerce platform is owned and operated by PDD Holdings, which also owns Pinduoduo, a popular social commerce platform in China. Temu is headquartered in Boston in the United States and first went live there in September 2022. The platform had a quick rise to popularity, becoming the number one most frequently downloaded app on Apple’s IOS App Store in mid September and holding its position on the charts right into January. With 19 million lifetime installs across the App Store and Google Play, more than 18 million of which came from the U.S. In January alone, the app saw five million downloads.
Launching thousands of products a day, Temu allows global vendors to sell and shop directly to US customers without having to rely on warehouses in the US. Product pricing often seems too good to be true with items like Lenovo headphones for less than $10 USD, clothing for $0.19 USD, and various homewares and gadgets with miniscule price tags. The site lists items across all retail categories.
Reported by Inside Retail, data analytics from YipitData shows the company reached $500 million USD in GMV in the market during its first five months of operation. PDD Holdings has been listed on the Nasdaq since 2018, with a current market cap of around $120 billion USD.
The platform began its global expansion when it launched into Canada in February, offering a 30 percent discount to new users in the country. Temu integrates gamification into its site with a campaign on social media in which the more you convince others to sign up, the more credit you earn. It has continued the expansion, now operating in six European countries, including France, Germany, Italy, the Netherlands, Spain and the United Kingdom. It launched in Australia and New Zealand in March with no official announcement, and is offering free shipping on all orders and free returns within 90 days.
AFR reported earlier this month that the platform has had a six-fold increase in month-on-month hits to its website to about 280,000, while Amazon is getting over 45 million hits a month, and Catch.com gets nearly 8 million. While not presenting a challenge to these retailers hold over Australian consumers just yet, its low price offerings and low cost fulfilment operation could quickly overtake its rivals.
According to Power Retail’s Trajectory Report #64, online marketplaces remain popular among consumers due to convenience, affordability, and good delivery options. As of March 2023, Amazon remains the most popular online marketplace among Australian consumers at 56 percent, followed by eBay AU at 52 percent. Interestingly, Australia-based merchants remain the most popular marketplaces with 73 percent of consumers reporting a preference to shop local, which may slow Temu’s growth here.
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