By CHENG Lu
Temu, the bargain-hunter e-commerce platform owned by PDD Holdings, operator of Pinduoduo in China, opened new sites in five European countries this week.
The debut of Temu in Great Britain scheduled for March 25 had been put off until April 21 due to “logistics issues.”
Two days after the UK site started taking orders, Temu opened its metaphorical doors in France, Germany, Italy, the Netherlands and Spain.
Temu is a marketplace for everything from kitchen goods to clothes to electronics. It quickly became the most downloaded app in the US and continues to dominate the country’s app stores, with tens of millions of US users. Downloads which were swelled by a US0-million, 30-second ad during the Super Bowl.
The platform is holding grand opening sales for each new European country. The new sites offer customers up to “90 percent discounts” and free shipping. It’s hard to see exactly what “discount” means for an operator who has never previously sold anything in the country, but on the homepage of Temu’s European sites, most products are tagged under 4 euros (US$4.40, 30 yuan).
Temu now operates in ten countries. It has been the most popular shopping app in the US for 172 straight days and is now the most downloaded shopping app in Australia, Canada and New Zealand.
Logistics problems persist for Temu. In March, sellers received a message that they would not be able to replenish their inventories or add new products until further notice. Warehouses, as they were told, needed to prioritize existing orders.
The platform dispatches products from the same warehouses in China all over the world, but some bestselling products are still out of stock.
“The business grew too fast. We got too many orders in too short a time,” a Temu employee told Jiemian News. Some in sales and marketing were told to simply stop working for a week to create some breathing room for the rest of the company.
Meanwhile, Temu is to start charging vendors service fees. The company didn't reveal when will it start and how.
In China, the service fee is 0.6 percent of each deal, but tariffs in European countries can be a heavyweight for vendors. For example, the UK’s standard VAT rate is 20 percent. For a platform that seeks small profits and quick turnover, it is huge pressure.
Data from ecommerceDB suggested the European market has huge potential. By 2022, the total revenue generated by e-commerce in Europe reached US$ 634 billion, while the number in China is US$2 trillion.
