Temu is the Now the Most Downloaded Shopping App

John Suder
Feb 24, 2023

What is Temu?

If you watched the Super Bowl this year, you might have seen a commercial for a shopping app called Temu (pronounced "Tee-moo"). Their tagline is "shop like a billionaire," and displays "shockingly low" prices, like dresses for under $10.

According to the company's website, it links customers with "millions of sellers, manufacturers, brands, and logistic partners around the world" to "empower" them to lead "best lives," and it is dedicated to "providing the most affordable quality products."

Launched in 2022, Temu is owned by PDD Holdings, formerly known as Pinduoduo, the Chinese eCom giant. Its offices are in Boston, Mass.

Pinduoduo has had success in China by supplying low-income consumers and farmers with goods at steep discounts directly from manufacturers. Its market capitalization is at $102 billion, and its stock price has improved throughout a challenging year for rivals like Alibaba.

Inflation-weary consumers, attracted by the ridiculously low prices, made the app the most downloaded (bypassing even Amazon and Walmart!). According to CNN, Temu's app has been downloaded 24 million times since its debut and has more than 11 million monthly users.

The company said it also recently opened in Canada last week.

How Can Their Goods Be So Cheap?

Temu said it offers its "ultra inexpensive prices" by utilizing its parent firm's vast sourcing and distribution network.

Temu provides significant savings on a wide range of items, the majority of which are sent directly from Chinese companies. Temu's popularity may be attributed to its marketing tactic of offering free things in exchange for users' social media promotion and referrals of friends and family.

The company said it chose Boston as its U.S. headquarters because of the region's work talent, its proximity and accessibility to Logan Airport, and its ease of access.

You'll find everything from home goods to clothing to electronics on its website, with discounts that sometimes reaching double digits.

Additionally, the company offers free shipping on "almost all orders" and free express shipping on orders over $129, as well as free returns within 90 days.

According to Temu, it has a "zero-tolerance policy" toward counterfeiters and imposes "heavy penalties" on "infringers."

According to Time, Temu has been operating for less than six months and ships products directly from warehouses in China. It also offers a reward system for users to have others sign up and place orders, Time added.

Cheap Goods Come at a Cost

Temu is beginning to gain a bad reputation for undelivered deliveries, enigmatic charges, wrong orders, and unhelpful customer assistance. Temu now has a BBB customer rating of fewer than 1.5 stars and has already received more than 30 complaints about it.

"They're making delivery promises, and people aren't getting their stuff when they're supposed to be," Melanie McGovern, the director of public relations and social media for the BBB, tells TIME.

How This Can Affect eCommerce and the U.S. Economy

As Temu continues to gain traction in the American market, it could indicate a looming price war among powerhouse eCommerce players. With customers now able to purchase directly from China at discounted rates, domestic manufacturing runs the risk of being undercut as manufacturers react by cutting their profits and competing for prices that are lower than ever before.

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