Beware! Temu may trigger another wave of "price war"!

Since its launch, Temu has successfully gained popularity in the United States, Canada, Australia and many European countries through its "low-price strategy".

After becoming popular in Western countries , it turned its attention to Southeast Asia, gradually entering Malaysia and the Philippines, and quietly launched its Thailand station in late July this year, causing quite a stir.

It is understood that Temu offers low-priced goods to attract consumers by directly connecting Chinese manufacturers and wholesalers with global customers . In this regard, Thailand Post reported that "daily shipments have dropped by 20%-50% since July."

In addition, foreign media recently pointed out that the emergence of Temu may intensify the price war.

Specifically, in the Southeast Asian market, which is recognized as a "hot spot" by cross-border sellers, platforms such as Lazada and TikTok Shop have been deeply rooted for many years. Facing old players, Temu's current competitive advantage does not seem to be so obvious.

A survey by market analysis company Cube Asia on the products and prices sold on Temu and other local platforms showed that a large proportion of products sold on platforms such as Lazada come from official stores operated by brands or authorized dealers, but Temu does not follow this model and instead prefers a large number of unbranded products.

While Temu does offer a “blue check mark” verification for products shipped directly from authorized sellers or brand manufacturers, the agency’s study of 1,000 products showed only 12% fell into that category.

Additionally, in some cases, Temu offers very attractive subsidies, including large first-order bonuses, coupons and free shipping, but it must be noted that its high discount rate may be due to the high price of the goods themselves.

In order to evaluate the price competitiveness of different platforms, Cube Asia also conducted a product price comparison study , and the results showed that among the five selected reference products , only two products on the Temu platform were the cheapest.

This shows that the prices of three-fifths of products on Temu are actually higher than those on platforms such as Lazada and TikTok Shop , and its cost advantage is not significant.

In addition, Temu 's cross-border model is not unique in the area. Platforms such as AliExpress, Amazon, Shein, Lazada, etc. also provide overseas shipments, and many of the products they sell are from China; and local consumers have long been accustomed to low-priced goods, and these e-commerce platforms all provide low-priced goods.

Since most similar products are already available on the above platforms, it is difficult for Temu to change the loyalty of local consumers and the competition is very fierce.

In this regard, Cube Asia said that it may be too early to assess the long-term impact of Chinese e-commerce giant Temu on Thailand and Southeast Asia's e-commerce market, but sellers still need to be prepared for a new round of "price war" that may break out.

Meanwhile, Cube Asia co-founder Simon Torring believes that if Temu continues to maintain its strong promotional efforts and low-price strategy, it could disrupt the existing e-commerce market landscape .

Now the situation in the Southeast Asian market has changed . Temu ’s price advantage is facing a huge threat. In order to enhance its competitiveness and seize market share, it may continue to lower product prices or adopt large subsidies. In the future, local platforms and sellers may have a " tough battle " to fight.