Ecommerce platform Temu has started selling to the UK. But will it repeat the success of its US launch in Europe?
Temu, the number one app that has taken the US by storm, this week started selling in Europe, including the UK.
Since its launch in September 2022, American-based Temu owned by PDD Holdings, which also holds Chinese social commerce app Pinduoduo, has quickly snatched the position of the most popular shopping app in the US following 19 million downloads in the first quarter of this year.
But will Temu, known as the “TikTok of commerce”, gain popularity in the UK?
Jeb Smith, founder of Parker-Marker, a business and technology consultancy, thinks that is a certainty.
“Temu is well-positioned to become a major player in the UK market. The platform offers a wide range of features that are attractive to both consumers and businesses. It has a user-friendly interface, a wide selection of products, and competitive pricing. Additionally, Temu has integrated a number of payment options, making it easier for customers to make purchases.”
Unlike its main rival Shein, which was the sixth most downloaded online fashion retailer in the UK in 2021, Temu is an Amazon-style marketplace, selling products from primarily Chinese suppliers. It also sells a wider variety of items rather than just clothing, with everything from with electric milk frothers to bunion correctors promoted on its homepage.
The app is full of flash deals and hefty discounts as it aims to appeal with super low prices. It also offers free delivery and return on all orders with no minimum spend required.
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The UK is a sizeable market for Temu to target and is the most advanced in terms of ecommerce in Europe. Even after the slowdown post-pandemic, online still accounts for more than a quarter of all retail sales, according to the Office of National Statistics.
Can Temu gain a foothold in this well-established market and gain share from what is likely to be its biggest competition – Amazon?
Nicky Dutta, the CEO of jewellery retailer Lorel Diamonds believes so.
“Companies like Temu can take over the market as price-sensitive consumers may gravitate toward companies offering the best value for their money. Temu is capitalising on its cheap pricing model to gain market share. A company with a ‘predatory pricing strategy’ will gain popularity, especially during this period of inflation,” he says.
Jeremy Nitta, CEO of online trading firm Trading Funder believes that although Temu may gain traction in the short term, it might be harder for it to find its place longer term in the UK.
“While Temu’s entry into the UK market may create a temporary disruption, it is unlikely to have a significant long-term impact on the overall ecommerce space in the UK. This is due to the high level of competition already present amongst several established players and new entrants alike.”
However, UK retailers should be worried about its arrival, according to Mundut.
“Existing UK ecommerce businesses will need to adapt and innovate to remain competitive in the face of this new competition.
“They may need to focus on offering unique products, improving their customer experience, and optimising their pricing and marketing strategies to stand out in the market.”
“Overall, the entry of Temu into the UK ecommerce space is a positive development that can drive innovation and growth in the industry.”