Understanding the business model and strategies that allow Temu to offer products at significantly lower prices than traditional retailers.
Temu offers low prices through direct manufacturer relationships, bulk purchasing, minimal overhead costs, aggressive pricing strategies, and leveraging parent company PDD Holdings' logistics network and technology.
Temu connects directly with manufacturers, primarily in China, eliminating multiple middlemen and distributors that typically add markup to products.
Temu's parent company, PDD Holdings, operates at enormous scale, allowing for bulk purchasing that dramatically reduces per-unit costs.
As an online-only marketplace, Temu avoids the significant costs associated with physical retail stores and traditional brick-and-mortar operations.
Temu is willing to operate at lower profit margins or even losses initially to gain market share and build customer loyalty.
Leveraging sophisticated algorithms and automation reduces operational costs and improves efficiency throughout the supply chain.
Operating from China provides access to lower manufacturing costs and favorable trade conditions for cross-border e-commerce.
Quality Varies: Lower prices sometimes mean lower quality materials or manufacturing standards.
Longer Shipping: International shipping often takes longer than domestic retailers.
Customer Service: Support may be less responsive than traditional retailers.
Return Process: Returns can be more complex due to international shipping.