Temu has new moves! Plans to enter two "new markets"

Pinduoduo's cross-border e-commerce platform Temu has been online in the United States for more than two months. With its low-price marketing model, it has successfully aroused enthusiastic response from American consumers.

On September 17, Temu became the most downloaded shopping app in a single day on the Google Play Store.

On October 18, Temu surpassed Amazon Shopping to top the US App Store's free shopping app list.

In addition to the US market, Pinduoduo has also launched Temu in Africa and achieved very good results.

Recently there is news that Temu will explore new markets!

Temu plans to expand into Canada and Spain. What are its chances of success?

Yi En Jun learned from LatePost that Pinduoduo's cross-border e-commerce platform Temu is currently preparing to enter Canada and Spain. The Canadian site is currently under preparation, followed by the Spanish site.

At present, the market size of Canadian e-commerce is very large. According to the latest research data from eMarketer, the sales of Canadian e-commerce market will reach 109.28 billion Canadian dollars (80 billion US dollars) in 2022, a year-on-year increase of 15%, and Canadian e-commerce will maintain a steady growth trend in the next few years.

There is naturally fierce competition in such a huge market. Currently, Amazon can be said to be the only dominant player in Canadian e-commerce. However, with the expansion of the e-commerce market, many players with accumulated experience are actively seizing market share, such as e-commerce giants such as Walmart and eBay. Now Temu will also join the market.

It is very easy to select products for the Canadian site. Basically, no additional preparation is required. Any product that is popular in the US site can be sold well in the Canadian site. Sellers on the US site can directly expand their existing business there, saving preparation time and costs, so this may be an important reason why Temu chose to enter the Canadian market.

Specifically, the best-selling categories on the Canadian site are mainly consumer electronics, personal products (including clothing and accessories, etc.), home furnishings and furniture. Basically, they are similar to the best-selling categories on the US site, but there is a slight difference in market share. Currently, the largest category in the Canadian market is consumer electronics, followed by clothing and accessories. Affected by the epidemic in recent years, home furnishings and furniture, personal care and health, and beauty categories have shown high demand and are now in a rapid growth stage.

Moreover, Canadians prefer cross-border shopping to domestic shopping. According to statistics, 83% of Canadian consumers will buy international products. In terms of preference, the first choice is American products, followed by Chinese products. After Temu enters the market, there will be a huge market opportunity.

Another target market that Temu has set its sights on - the Spanish market has grown very rapidly in recent years and is generally considered by the industry to be the fourth largest B2C e-commerce market in Europe after Germany, the United Kingdom and France.

Data shows that the Internet penetration rate in Spain was 93% in 2022, and 68% of Spanish netizens shop online on a daily basis.

There are currently many e-commerce platforms commonly used by Spanish consumers, including Amazon, eBay, AliExpress, Milanuncios and Segundamano.

Milanuncios and Segundamano are both classified information websites. Milanuncios is a website that only targets the local Spanish market, while Segundamano is a website that targets Spain, Mexico, Colombia and Argentina.

Spanish consumers generally choose Amazon as their first choice when shopping overseas, and relatively few consumers choose search engines or independent websites.

Currently, the top four countries for Spanish consumers’ cross-border purchases are the UK, China, the US and Germany. The UK accounts for 14.2%, China accounts for 12.5%, the US accounts for 10.3% and Germany accounts for 9.9%. It can be seen that Chinese products are very popular in Spain.

Moreover, cross-border consumers in Spain are generally young and middle-aged people, with a per-customer spending of 100-500 euros, and strong spending power. Generally, the categories with high demand in the Spanish e-commerce market are 3C digital products, clothing and accessories, outdoor products, and household goods. At the same time, Spanish people also often buy clothing, shoes, home electronics, books, auto parts, and food online.

After Temu enters Spain, its full range of low-priced products must be very advantageous.

Temu is not only busy exploring new markets, but is also making some new adjustments for the US market.

Temu opens JIT pre-sale mode to the US site

Recently, Temu opened the JIT (Just-In-Time) pre-sale mode to sellers on the US site in order to improve the delivery efficiency of sellers.

Previously, Temu merchants had to go through multiple reviews after listing their products, and only after the products arrived at the warehouse would the product link be listed on the front desk. If a product was out of stock in the warehouse, the link would be automatically removed.

Not only that, sellers also need to go through multiple audits when preparing goods. First, product information and prices must be reviewed by the platform. After the review is passed, they must be sent to the domestic transit warehouse via SF Express or ZTO Express. If the seller wants to launch new products, there are also quantity restrictions. The first batch of new products cannot exceed 30 pieces, and only the second batch of products has no quantity limit. Some categories also need to be sent to the Temu office in Panyu, Guangzhou for review by quality inspectors. Merchants can only prepare goods after the review is passed.

Although Temu's advance stocking model can ensure the timeliness of online shopping for overseas consumers, for merchants, the domestic epidemic may affect product stocking. Even if the goods are prepared in advance and delivered to the transshipment warehouse, they will still need to queue up because there is too much goods in the warehouse. Some products will be taken off the shelves before they can enter the warehouse.

The JIT pre-sale model launched by Temu is relatively beneficial to sellers. Sellers no longer need to prepare goods in the transshipment warehouse in advance. They only need to send the goods to Temu’s official warehouse in the country within 24 hours after the consumer places an order.

Merchants receive JIT stocking lists at 8:00 and 16:00 every day. Temu requires merchants to ship goods within 24 hours of receiving the stocking list. It should be noted that merchants can only choose "SF Express Expedited" delivery for shipment, and the shipping costs need to be borne by the merchants themselves. If the merchant fails to ship within the specified time, Temu will impose a fine on the merchant based on the value of the product.

There are two specific fines: if the merchant fails to deliver the goods within 24 hours, the platform will impose a fine of 1 times the value of the goods on the merchant, and the product will be directly removed from the shelves. If the merchant fails to deliver the goods within 48 hours, a fine of 5 times the value of the goods will be imposed.

In the early stage, only provinces near Guangdong can participate in the JIT pre-sale model, but there are threshold restrictions. Merchants who want to participate in the JIT pre-sale model must first pay a deposit of RMB 5,000 to be eligible to participate. It is understood that merchants can choose whether to participate in the JIT pre-sale model according to their own wishes.

Currently, the average customer order value of Temu's US site is between US$20 and US$25, while the average customer order value of SHEIN is US$75. Although Temu's US site has adopted a low-price strategy in the early stage, the platform's review mechanism and product services for merchants are still very strict, which can be seen from Temu's delivery model and the latest JIT pre-sale model.

It is very necessary to review merchants and products with high standards, which will be more conducive to the development of the platform, and Temu is not short of high-quality merchant resources.

Currently, Temu is making full preparations for "Black Friday". Recently, Temu has launched the "Give 40%, Get 40%" event, where users can get a 40% discount coupon by sharing the discount code.

The competition among e-commerce platforms in the United States will become more intense with the addition of Temu. Let us wait and see what kind of performance Temu will achieve on Black Friday this year.

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