I have been writing about Temu, the Chinese webshop that launched in the US in September 2022, since the very beginning. But living in The Netherlands, I had not yet been able to actually place an order myself. When Temu expanded to several English-speaking countries in the first quarter of 2023 (Canada, New Zealand, and Australia) it became clear that it would only be a matter of time before Temu would arrive in Europe.
In the meantime, building on social media campaigns and gamified user acquisition, Temu headed the app charts in countries it had already launched in.
We have ways of making you buy!
I had registered on Temu with an e-mail address to keep track of what they were doing. After an initial series of e-mails trying to get me to make my first purchase in September, it went quiet. But then in January Temu’s activation campaign kicked in and I started receiving frequent e-mails.
At the moment, this has reached rather ridiculous levels: I’m getting 3 or 4 e-mails a day on that e-mail address now. When researching the app again for this article, I now found that in the settings it has a slider that you can use to set the frequency of promotional e-mails to ‘none’, ‘infrequent’, ‘normal’, and ‘frequent’. Strange enough, the frequency for that e-mail address was set to ‘none’.
Temu was supposed to have launched in the UK in late March, but it got delayed until April 21st, possibly because of some logistical hiccups that Temu was experiencing in Guangzhou, China earlier this year. A few days after the UK launched, Temu opened in Spain, Italy, Germany, France, and The Netherlands.
It should be mentioned that all Temu’s country websites are still using the English language. It is my belief that, unless Temu provides better localisation, its growth potential in these countries will be seriously limited.
No way to choose your local language in the settings (yet?).
As in other countries it had already launched in, social media like Instagram and websites with display advertising started showing Temu ads. Meanwhile, Go Go Dutch, a platform for Chinese diaspora in The Netherlands, was sharing a special discount coupon code for first purchases.
Placing my first order
Unlike Chinese consumers, I often find buying on a website more convenient than on an app. Temu is an app that stimulates browsing products and making impulse purchases through ‘lightening deals’ (flash sales), ‘recommendations’, ‘best sellers’ and ‘opening sales’ and ‘new arrival’ selections, as well as through games. But I prefer to go straight for products I need instead of mindless browsing and impulse shopping.
I searched for a few articles to organise my luggage when travelling with a large suitcase and something to weigh that same suitcase. I found the required items at affordable prices and added the coupon code for an extra 30% off as a new customer.
A few notable things about the order:
- I could use Ideal, a local payment option for payment, without any problem.
- Temu estimated delivery on the 20th and promised a €5 credit if my order would arrive later.
- The confirmation e-mail still offered the option to add extra items to my order (which I didn’t).
- The online receipt (linked in the e-mail) offered free returns in 90 days without return charges.
- Having registered a phone number and e-mail, I got frequent updates on my order through text messages and e-mails.
- I received e-mails for:
- Order confirmation (May 11th)
- Confirmation of shipping (May 12th)
- Notification of the DHL tracking number (May 12th)
- ‘Out for delivery’ notification (May 17th)
- Delivery notification (May 19th)
- Request to review my items (May 19th)
- Thank you e-mail for reviewing (May 20th)
- Each of these notifications came with a matching text message on my phone.
- In the app, an even more detailed order status could be referenced:
The whole process went relatively smoothly. It was only when delivery neared that I ran into a problem. When I order something on Amazon I’m used to getting 1) Amazon shipping notification e-mail with expected delivery date 2) a DHL notification e-mail early in the morning of the delivery date, telling me the timeframe they will deliver in (normally around lunch or dinner time) 3) sometimes another Amazon e-mail confirming that the goods will be delivered that day.
I received no such DHL notification for my Temu order. Both the Temu e-mail and text messages with the ‘out-for-delivery’ notification were sent at 12:24 PM on the 17th. A delivery attempt was made at 12:44, only 20 minutes later. As a result, I wasn’t home at that moment and on such short notice, I could not arrange for somebody to receive the package for me. DHL did not offer a second home delivery and I had to go pick up the package at one of their ‘service points’ two days later (the 18th was a public holiday).
The same thing happened with my second Temu order. While, on the actual day of delivery, I could ‘manually’ follow the DHL tracking link from the Temu app or e-mailed status updates to see when my package would be delivered (see below), I did not receive a DHL e-mail notification with the expected delivery time. I received an ‘out for delivery’ notification from Temu as text message and e-mail at 12:09 PM. The package was delivered at 13:26. If the DHL had the information below early on the day, why wasn’t the fact that the package was ‘out for delivery’ or the time window shared through Temu?
When I went to pick up the first package there was a bright orange package in the pile of packages that DHL had just dropped off at the service station, a local jeans shop. ‘That’s probably mine’, I said to the grumpy lady at the counter. ‘I don’t think so, because those have not been scanned by us yet’, she said and went to check the previous days’ packages, only to come back and find that the orange one was indeed mine.
As such, the delivery by Temu arrived 2-3 days earlier than estimated, but timely communication between the courier (DHL) and Temu, or by the courier directly to me as I’m used to receiving for Amazon orders, proved the weakest link in the chain.
Meanwhile, the only inconsistency I could spot in Temu’s communication was in the delivery confirmation: “Your order has been delivered! (..) If delivered after May 20, you will get a €5 credit within 48 hours.” But considering Temu’s rather flawed launch some 9 months ago, it has come a long way and PDD does a lot better than some of its competitors.
Coming home, I opened the package and the products proved to meet expectations.
An industry insider later told me that the logistics for Temu to The Netherlands are done by a combination of Yunexpress, a cross-border e-commerce service provider, and DHL as the local courier. This combination is also used in other countries where Yunexpress and DHL are both active, like Germany.
Looking up the tracking number of my second order (May 14th), I could indeed see that Yunexpress received the package in Dongguan (May 16th), it was flown to Schiphol Airport (May 18th), handed over to DHL (May 20th) and delivered to me on the 22nd. It surprised me a bit that half of the delivery time, the package was actually already in The Netherlands, only 120 kilometers away from me.
After receiving my order, I decided to do a little price comparison (not counting my 30% extra first-order discount). There are two things that always interest me:
- How do the prices compare to identical products on Western marketplaces like Amazon (where they are also being sold by Chinese merchants/manufacturers)?
- How do prices compare to Pinduoduo, the local Chinese discount app that is run by the same company as Temu (PDD Holdings)? This gives us an idea about the real manufacturing price of the items since merchants normally still make some margin on Pinduoduo.
I’ve done a price comparison between Temu, Walmart and Pinduoduo in January. This time I decided to compare with Amazon and add Chinese platform Shein to the mix. Shein had just opened a marketplace on their website, adding many product categories that Temu is also selling to their original assortment of apparel. According to sources, prices on Temu are currently 20%-47% lower than on Shein, although Temu has been reported to have raised prices after their initial launches.
Here’s what I found…
Considering that roughly half of the sales prices of Amazon end up in Amazon’s pockets it’s no surprise that the prices on Amazon are seriously higher: more than double those on Temu. Shein proved to be indeed priced slightly higher (31%) than Temu.
One of the biggest misconceptions about Chinese webshops like Temu and Shein is that it’s all just ‘cheap rubbish from China’. Sure, one could debate the quality of some products, but the same goods are also being sold on western platforms, as the Amazon examples show, and without a doubt in Western offline retail shops too.
The price differences can be explained by wholesale and retail links, as well as logistical movements, that all add their own costs and margins to the original Chinese factory price. In case of the business models of Temu and Shein, those middlemen are removed (with Shein and Temu being the only links between merchant/manufacturer and consumer), and goods are being shipped directly to the western consumer.
But if you think that Shein and Temu are ‘dirt cheap’ and they offer the absolute lowest price, think again. Looking up the same goods on China’s Pinduoduo platform proves that in China I could have bought identical items for just 16% of the Temu price or 7% of the Amazon price. Considering the high volumes of Pinduoduo’s demand generation (link in Dutch) in the Chinese market, at those prices the merchants or manufacturers are probably still making a tiny margin on those products.
Of course, in China they only have to pay for inexpensive domestic shipping, but with the margins that Temu and Shein must be having on their sales there is probably still enough profit to be made for those platforms. Especially considering how Temu sets the sales prices and uses a bidding system to force merchants to lower their prices. But more on that in an upcoming article on Temu …