By CHENG Lu
Temu, the sister site of Chinese discount e-commerce platform Pinduoduo, China's "virtual bazaar," launched a Republic of Korea (ROK) site on Monday, the fifth new country this month but only the second outpost in Asia.
Temu will pursue its now standard strategy of discounts, coupons and free shipping in ROK as the key to quick expansion. Customers get their packages within two weeks. The marketplace ships everything from fermentation locks to clothing, directly from Chinese traders to customers overseas.
At the beginning of this month, Temu was launched in Japan, returning to its Asian roots for the first time. Just three weeks later, Temu made its second stop in Asia.
ROK is the fifth largest e-commerce market in the world following China, the US, the UK and Japan. Of its 51 million people, over 33 million in ROK have shopped online, though only 2.5 percent of the retail market comes through e-commerce. With online sales in China scooping about 50 percent of the county's entire shopping spend, there is obviously plenty of room for expansion.
In ROK, Temu will, as per the company's standard business model, focus on low prices, with products ranging from 1000 KRW (5 yuan, US$0.70) to 30,000.
The initial performance has fallen way short of expectations. Temu's most-touted measure of its own success is neither profit nor shipments, but the app's status in app stores.
In both the US and Japan, Temu quickly became the top shopping app in the stores, a status Temu trots out in almost all of its press releases and publicity material. Actual active users remain obscure.
In ROK, the standard model has made little or no impression on the market and the app languishes at number 163 among similar apps in the stores, with only 10 ratings and two reviews.
ROK is also the major market of AliExpress, Alibaba’s cross-border e-commerce platform. Led by JIANG Fan, Alibaba Global Digital Commerce Group has established warehouses in Shandong Province which faces ROK across the Jesu Strait.
In March, AliExpress in South Korea launched its bargain-hunter service “Choice” which offers cheap products with free shipping within five days. Orders have since surged.
