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Text / Liu Yadan
Source/Power Plant (ID: wonder-capsule)
Since September, Pinduoduo announced that it will be an overseas cross-border e-commerce company – Temu, and its momentum has been high.
Temu topped the iPhone App Store on Monday, October 17, ahead of Amazon, Shein and Walmart. It has been in the top 10 in the iPhone and Android app stores for over a week.
Although low prices and advertisements have brought short-term traffic, Wish, which is also a low-cost e-commerce company, has ushered in a large number of user losses and performance losses. Temu’s prospects seem uncertain. At least in overseas social media, Temu has not aroused widespread discussion among users, and the hidden quality problems brought by low prices have appeared.
Downloads from KOl and ads
Even though it is number one on the iPhone by downloads, Temu’s meteoric rise has been driven almost entirely by ads, and the app has yet to catch on on social networks.
Taking Facebook as an example, the power plant used “Temu” as the key word for posting and found that there were only 4 posts related to Temu e-commerce. It can be said that in the North American market, it did not attract users’ attention.
Correspondingly, in the past two weeks, Temu has put a lot of money on overseas social media. For example, there are many Temu unboxing videos on Youtube recently. According to Youtube’s rules, online e-commerce usually chooses direct delivery and linking. At present, many Youtube unboxing videos put the “TEMU” logo directly on the homepage.
Industry insiders told the power plant that the unpacking with the logo directly in the video is basically a launch. The official will also reduce the traffic weight of similar videos accordingly. In TikTok, there are also many try-on haul activities launched by Temu and Internet celebrities.
On the US forum Reddit, there have also been a large number of posts titled “Download Temu App Cashback”. Click to enter and get the invitation code. The amount of cashback will depend on the number of heads pulled, generally ranging from 2 to 50 US dollars.
Within Pinduoduo, since the first half of this year, internal operations have been transferred to start the docking of overseas KOLs; since last month, Pinduoduo has also specially set up positions for overseas user growth.
According to media reports, Temu’s investment budget reached 1 billion yuan in September, and this budget will exceed 7 billion in the next year, mainly for public domain traffic acquisition and content-based delivery.
But can the users in exchange for this strong delivery model be sustainable?
Wish, established in 2010, has a similar positioning as Temu, targeting low-consumption groups in the United States, with commodity prices as low as $1, and most of its sources come from China. Third-party data shows that Wish has been the most downloaded app for years, but it also has a very high churn rate.
Most of Wish’s entire platform traffic comes from Facebook and Google ads, and the traffic attracted by low prices has been lost this year due to low quality. Wish’s second-quarter financial report released this year showed that its quarterly revenue was $134 million, a decrease of 79.57% compared to the same period last year; a net loss of $90 million.
Copy domestic low-price activities
On September 1st, Pinduoduo’s cross-border e-commerce platform was officially launched overseas. The platform was named Temu, and the App Store application details page displayed the meaning of “Team Up, Price Down”, which is similar to the domestic name Pinduoduo, that is to buy The more people you get, the lower the price.
Temu’s drainage method is very simple – cheap. Temu suppliers told the power plant that Temu asked for a lower supply price than the 1688.
On Temu, items under $1 abound, like a small humidifier for $0.49, a coat for $0.99 and a pair of slippers for $2. The same product will also be cheaper than Amazon or other foreign e-commerce platforms. For example, Etsy sells accessories for $10, and Temu only sells them for $1. In the normal category, Temu mobile phone cases, necklaces, rings and other daily items are priced at less than $5, while the price of products in the women’s category is basically maintained at less than $10.
In addition, Temu has launched a “1 cent for 1” promotion, where each account can choose an item for $0.01, and free shipping. Temu is offering a 30% discount for new users.
Although the popular domestic “Chop a Knife” campaign has not been replicated overseas, Temu has also launched a discount on sharing links. As long as you share the link with your friends, both parties can enjoy a minimum discount of 40%, which is similar to the domestic Pinduoduo. ‘s ordering function.
In terms of express and logistics, in addition to full refunds for delayed deliveries, Temu’s free shipping service threshold has been lowered from $49.9 to $29 later.
The selection has not been released yet
An important reason why Temu has not yet formed a large social media following in the North American market is that it has not innovated in product selection. Compared with Shein, which focuses on affordable clothing, and Wish, which has been deeply involved in the low-cost field for several years, Temu, which entered the market late, initially positioned itself as a full category, which also meant that it did not focus on a single field.
November 1st is Halloween in the West, which is the first major festival in the West after Temu goes live. On Amazon, Halloween-related searches have topped the search charts for two weeks in a row. Temu also attaches great importance to Halloween, and uses Halloween as a traffic entry point.
At the same time, cross-border platforms such as SHEIN and Whis did not focus on Halloween. Some suppliers revealed that if they enter Temu with products such as Halloween and Christmas, it will be easier to be approved. And Halloween is also considered by industry insiders as an important opportunity for Temu to launch in Western markets and social media.
However, at present, Temu did not take this out of the circle. Among the related Halloween hot-selling products, Temu only has one bracelet to rush into the top ten best-selling products.
The bonus period has passed and the quality crisis is still there
Cao Guangyao, a cross-border e-commerce expert and CEO of Dianshi Chuhai, understands a group of Chinese cross-border e-commerce companies that emerged around 2013 to 2015 as the success of the purchase model. They all seized the cheapest social media in the early days of European and American mobile Internet. Low-cost media traffic. SHEIN, JJ’S House, and Floryday have all been beneficiaries of this model.
However, Wish has dropped from more than 100 million in 2020 to 27 million in 2022. The main reason for the decline in revenue and decline is the quality and safety of products, and consumer trust has declined.
Although Temu is deliberately avoiding the old road of Wish, it has added more thresholds in the selection of products. But the quality problem brought by low prices is a stubborn problem in the business model. A Temu user revealed that almost half of the second box of Temu products he bought “stepped on thunder”. Therefore, some users choose to go shopping on other platforms after a few orders.
“I am very disappointed when I get the package. The packaging is so simple that it has been damaged. The quality of the products inside is unbearable. It can only be said that the pictures of the products are really for reference only.” Temu users shared on social platforms. Because of the frequent occurrence of product quality problems, users will even share Temu’s “stepping on thunder” products by category.
Shopping experience usually affects the repurchase rate of e-commerce platforms. Although the downloads of Temu have soared, it is not yet known how the user repurchase rate will be. Pinduoduo’s official response to the power plant said that it is inconvenient to disclose to the public.
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