Temu Has Been So Successful, What Did It Do Right?

Temu Super Bowl commercial
Evan Arroyo

In the bustling e-commerce arena, a new player Temu has emerged, attracting the attention of countless consumers with its compelling value. This Boston-based online marketplace has quickly amassed a loyal following, drawing in consumers with its wide range of quality yet affordable merchandise. Temu's reputation soared after its debut advertising at the 2023 Super Bowl featuring its captivating slogan “Shop like a Billionaire.”

What Is Temu?

Launched in September 2022, Temu is an online marketplace headquartered in Boston that has quickly gained the trust of millions of consumers by offering a wide selection of quality products at attractive prices. Initially targeting the US market, Temu has since expanded its presence to a total of 22 markets, including Canada, Mexico, Australia, New Zealand, European countries such as the UK, France, Austria, Belgium, Germany, Italy, and Japan..

Temu's success is rooted in its unique next-gen business model. Temu leverages consumer insights to assist suppliers and manufacturers in optimizing product design, production, sales and marketing, and logistics. The result is a more intelligent and efficient supply chain, capable of reducing costs by at least 50% compared to traditional practices.

Key benefits of Temu’s next-gen manufacturing model

Temu's Reviews

When customers look for information about a company's legitimacy and reliability, they often turn to review sites to learn from the experiences of others. Both Temu's popularity and segmented customer feedback are reflected in its ratings across major review sites such as the Better Business Bureau, Trustpilot, Sitejabber, and Google Play Store.

By reading reviews of Temu, we can see that Temu encounters typical e-commerce challenges around delivery and product satisfaction.

According to the Better Business Bureau, Temu has an average rating of 2.49 stars, higher than all the e-commerce platforms on BBB.

All reviews, positive or negative, should be taken with a pinch of salt. Negative reviews are usually more common on third-party review sites since many people try to use them as communication channels to get their issues heard and resolved.

That being said, Temu does have a decent track record of responding to most customer reviews and shows their customer care through their 24/7 live chat support, generous 90-day free return policy, and free credits for late deliveries.

Temu is also an Editors' Choice app on Google Play. This title is only for apps that exhibit outstanding quality, user-friendliness, and innovation. By achieving the No. 1 rank in the shopping category on Google Play and being recognized as an Editors' Choice app, Temu has received both consumer support and official endorsement from Google.

Temu has encountered challenges in logistics, customer service, and product quality as can be seen from some of the negative reviews. However, it does seem like they are making progress to address them.

Temu’s Secret to Unlocking Affordable Quality

At the heart of Temu's success is ultimately its low prices, unlocked by their innovative Next-Gen Manufacturing (NGM) model. Professor John Deighton from Harvard Business School calls Temu a “pioneering tech-enabled platform” that is “changing the very nature of business.”

What is it and how does it work? To put it simply, Temu's NGM model enables sellers to decrease production costs starting from the design phase all the way to final delivery. These cost savings are then passed on to consumers in the form of lower prices. In return, consumers are encouraged to provide more feedback, leading to the creation of more affordable and better-customized products tailored to their needs. This virtuous cycle revolutionizes the entire retail process and ensures that consumers can enjoy the best prices.

Additionally, this approach allows sellers and brands to design and produce merchandise that precisely matches consumer demand, in the right quantities and at the right time. This lowers costs and also reduces waste. Under traditional approaches, Forbes estimates that the fashion industry overproduces products by about 30-40% each season.

Temu's growth has been remarkable in a short period of time. It reached the top downloads in the shopping category of both Apple's App Store and Google Play and is quickly establishing itself as a high-potential and innovative player in the e-commerce industry.

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