E-commerce platform startup Temu expands to Europe, following a successful U.S. launch
Last summer, we wrote about Pinduoduo after China’s discount e-commerce giant announced the launch of a new U.S. shopping site called Temu as part of its push to make inroads into the overseas market and challenge Amazon. Temu is a cross-border e-commerce website that sells everything from clothing and accessories for women to home products and pet supplies at low prices.
Following a successful launch in the US last year, Temu now sets its eyes on the other side of the pond with expansion into the European market and has started selling to European customers including France, Germany, Italy, The Netherlands, Spain, and the United Kingdom, Reuters reported.
In addition to the previously available markets of the United States, Canada, Australia, and New Zealand, the Temu.com website now displays all of these markets on its location drop-down menu.
Known for its rock-bottom prices, the launch of Temu is Pinduoduo’s attempt to replicate the global success of its online fashion retailer Shein. Just like Walmart, the low prices could woo some Americans that are addicted to low prices.
Temu has made a big splash since launching in the United States last September, selling shoes, jewelry, beauty accessories, and home goods, most of which come from overseas, especially from China. Temu said shipping to the U.S. could take 7-15 business days. But the wait could be worth it. For example, Temu offers dresses for as low as $6 and an $8 handbag and $10 sneakers. Shipping is also free for orders over $49.
Temu’s cross-border approach drove Shein, which delivers to more than 150 countries, to become the world’s largest fast-fashion brand, with more than $58.5 billion in annual sales.
According to mobile intelligence firm Sensor Tower, Temu, which is located in Boston, witnessed 19 million U.S. downloads in the first quarter of this year. Temu is also the most downloaded software on the Apple and Google Play stores in the United States.
“It’s important to keep in mind that you may see longer delivery times than you’re used to from other e-commerce websites. This is due to the fact that items that may be coming from another country or need to be bundled or packaged with other similar-sized items,” the website says on its shipping information page.
In a conference call with analysts this week, Pinduoduo Chairman and CEO Chen Lei confirmed the company was aiming to expand its business overseas but did not mention the US launch.
“Overseas business is one of the opportunities that we see,” Chen said. “At the same time, we also see that many peers in the industry are achieving good results. So we believe that it is a direction that is worth trying out.”
Meanwhile, it’s too early to tell how Temu will be received by US consumers. Temu’s “main challenges will be cultivating trust and awareness among customers,” Jacob Cooke, CEO of WPIC, an e-commerce tech and marketing firm that helps foreign brands sell in China, told CNBC.
Pinduoduo was founded in 2015 by former Google employee Colin Huang. The e-commerce company has been dubbed “China’s Groupon” and a cross between “Costco and Disneyland.”
We covered Pinduoduo in 2018 after the then-eCommerce startup raised about $24 billion in valuation in IPO. The company was backed by Tencent and Sequoia Capital.