Launched just a few years ago in 2022, Temu has already become a leading figure in the e-commerce world and discount store sector. It generates billions of sales annually and sends over 4,000 tonnes of parcels daily overseas.
As a top online retailer, Temu offers invaluable lessons in expansion strategies and how to deliver the best shopping experience for your customers.
Here at Business2Community, we’ve gathered all the important dates and milestones in the Temu history book so you can better understand the secret sauce for the ultra-fast fashion leader’s success. We will also break down Temu’s structure to dissect how the shopping site works, how it makes money, and how you can mimic the success for your business.
A History of Temu – Key Dates
- Temu was launched in the US in September 2022 and generated $3 million in sales in its first month.
- In December 2022, Shein sued Temu for spreading misinformation about the company.
- By June 2023, Temu recorded $1 billion in monthly gross merchandise volume (GMV).
- Temu’s parent company overtook Alibaba to be the most valuable ecommerce group in December 2023.
- During the 2024 Super Bowl, Temu offered a 10-million-dollar giveaway, peaking the app’s search volume on Google.
Latest News & Controversies
Temu continues to grow its presence internationally, particularly in North America. By early 2024, Temu had not only gained momentum in the US but also expanded to other countries like Canada, Australia, and parts of Europe. Its aggressive advertising strategies, such as the notable Super Bowl campaign, have driven visibility and consumer interest globally.
In addition, Temu’s parent company, PDD Holdings, overtook Alibaba as the most valuable e-commerce company in China by the end of 2023, which was a significant milestone. The success is largely attributed to Temu’s unique Consumer-to-Manufacturer (C2M) business model, which cuts out middlemen and provides ultra-cheap prices.
Legal Battle with Shein: Temu has been involved in a high-profile lawsuit with rival Shein since 2022, where Shein accused Temu of defamation and spreading misinformation. Although the lawsuit was settled in late 2023 without further comments, it cast a spotlight on the fierce competition in the fast-fashion industry.
Supply Chain Concerns: A significant controversy surrounding Temu emerged in 2023 when a Congressional Committee in the US raised concerns over the potential use of forced labor in Temu’s supply chain. These allegations have sparked debates about ethical practices in fast fashion, particularly as Temu sources a majority of its goods from Chinese manufacturers.
Who Owns Temu?
Temu was created as the sister company of Pinduoduo Inc., one of the largest online stores in China. Temu is owned by PDD Holdings Inc., a multinational commerce group based in Ireland that was founded in China by businessman Colin Huang in 2015. It has a diverse portfolio of businesses in the retail sector.
While Temu is not a public company, its parent company had its initial public offering in 2018 in the US, raising $1.6 billion.
PDD Holdings launched Temu as the US version of Pinduoduo in 2022 as a strategy to expand its overseas market. Similar to its major competitors like Shein, Temu offers affordable ultra-fast fashion products with smooth and seamless deliveries within 7 to 14 days.
Currently, Temu is headquartered in Boston, Massachusetts, the US.
Who is the Temu CEO?
Temu has not released a lot about its company structure to the public. There is little public information about the company’s board of directors and leaders. Colin Huang is the founder of PDD Holdings and also owns Temu. He served as the CEO of PDD Holdings until 2021.
Huang was ranked the second-richest man in China by Forbes in 2020 when Pinduoduo experienced exponential growth due to COVID-19.
PDD currently has two co-CEOs, who were also founders of the company alongside Huang. One, Lei Chen, studied at the University of Wisconsin and was previously the CTO at one of Huang’s gaming startups. The other co-CEO is Jiazhen Zhao, who used to be the company’s senior vice president of the grocery and agriculture side of the business.
Growth and Development of Temu
Famed for its competitive prices, Temu is able to grow drastically in a few years’ time and become one of the most popular ecommerce platforms because of its marketing strategies and business model.
It sources products directly from sellers and ships them to customers, minimizing the time and costs needed for extra logistic arrangements. Temu works with major international shipping partners like FedEx, United States Postal Service, and UPS to ensure smooth and fast deliveries.
However, the rise of the fast-fashion giant has also brought concerns about its supply chain and monopolistic nature from the US government and other governing bodies overseas, which we’ll look at later.
Below, we’ve organized the timeline of Temu so you can catch up with its successful marketing strategies and gain insights into the online shopping industry. Whether you’re an entrepreneur, a developer, or an investor, this is everything you will need to know to succeed in your field.
2022: Temu Launched As the US Version of Pinduoduo
In September 2022, Temu made its debut in the US market with a shopping app on the App Store and Google Play. Customers can also choose to purchase on the website version. Prior to its launch, there was little in the way of international marketing efforts from the company.
When it was first founded, Temu offered a wide range of products such as beauty products, household items, and pet supplies, at almost wholesale prices. It offered a lot of cheap women’s dresses below $20 as well as shoes below $10. To American consumers who are used to rising inflation and price gouging, these prices are incredibly enticing.
However, there was a lack of choices in some categories, with some only containing a handful of items to choose from. It’s also important to note that Temu’s shipping service often takes weeks if not months to deliver items to the US. The selection gradually became bigger as the site took off and started working with more vendors.
Despite the lack of marketing efforts, Temu’s cheap prices and variety quickly garnered the love of US and international shoppers. The platform boasted $3 million in sales within a month of its launch. That number had shot up to $141 million by the end of 2022.
The new shopping site was quickly embroiled in a series of legal battles with one of its major Chinese competitors that also dominated the ultra-fast fashion industry – Shein. In December 2022, Shein sued Temu for allegedly using its influencers to spread degrading comments and misinformation about Shein on various social media platforms.
In response, Temu sued Shein 6 months later for engaging “in a campaign of threats, intimidation, false assertions of infringement, and attempts to impose baseless punitive fines” as well as forcing its manufacturers to work exclusively with the online store. By October 2023, the lawsuits on both sides were dropped without comment.
2023: Temu Becomes Most Downloaded Shopping App in the Face of Controversies
2023 was a remarkable year for Temu, gaining global recognition. By June, Temu recorded $1 billion in monthly gross merchandise volume (GMV).
However, skyrocketing success also brought controversies and criticisms for the Chinese retailer. The Congressional House Select Committee on the Chinese Communist Party reported the possible involvement of forced labor in Temu’s production chain.
Later on, a Temu spokesperson denied the accusations and the firm issued a statement to CNBC saying that they were completely ungrounded as all business relationships must be voluntary.
The accusations did not stop the rising star from achieving new heights as it continued to gain buyers’ recognition. In December, Temu’s parent company overtook Alibaba as the most valuable ecommerce group.
By the end of the year, Temu accounted for 17% of the market share in the discount stores category in the US, selling a variety of products with low prices to millions of consumers, as an analysis published by Earnest Analytics revealed.
It became the most downloaded shopping app in the world with 338 million downloads from both App Store and Google Play. The app generated the most interest from US consumers with 28% of the total downloads coming from the US.
The industry leader was also a top advertiser by revenue for Meta. Its parent company invested $2 billion in advertisements through Meta’s social media channels, targeting its young audience through influencer programs and campaigns.
2024 – Present: Temu Invests Millions in Super Bowl Ads
The ultra-fast fashion store experienced an 800% growth in sales between January 2023 to January 2024. Its rapid growth signified its popularity and American consumers’ desire for affordable goods.
During the 2024 Super Bowl, Temu aired its ads 6 times. Although the exact cost was not disclosed, a 30-second ad during the game was estimated to be around $7 million.
In the ad, the discount retailer offered new users coupons and discounts valued at $10 million and used its favorite slogan: shop like a billionaire. The marketing strategy was a success as searches for the app peaked during the ads.
According to the same report produced by Earnest Analytics in 2024, 28% of customers would return to the platform. Although its customer retention rate was significantly lower than the US-based Amazon (63.5%), it was still higher than its main competitors like Walmart (26.4%), Target (26.4%), and Etsy (12.2%). It also performed better than its Chinese rival, AliExpress, which scored 2.3%.
Temu demonstrated an upward trend with its retention rates over a 6-month period, indicating that its customers became more and more valuable to the firm as time passed.
How Does Temu Work?
Temu mainly makes money through commission fees, transaction fees, and advertisements. It charges vendors a percentage of the sales to ensure a stable income stream, despite its low prices. The firm works with major banks and has deep debit card networks to provide diverse payment options for international shoppers, boosting sales while attracting more business partners.
It has a comprehensive customer care program that offers one of the most generous returns policies in this business. It allows customers to return eligible items free of charge and get full refunds within 90 days.
The platform sources products from various vendors, giving consumers freedom in choosing the manufacturers and brands.
What Does Temu Sell?
The platform mainly sells beauty products, cosmetics, clothes, furniture, baby items, household tools, and pet supplies. It covers a wide range of daily items at cheap prices. Most of the time, there are special offers and sales going on for users to get additional discounts.
Why is Temu so Cheap?
As a top online retailer, Temu is able to deliver affordable products because of its business model. It adopts a Consumer-to-Manufacturing approach, allowing Chinese sellers to manufacture products and ship them to consumers directly.
This business model skips the need for warehouses in the US and middlemen, drastically reducing the costs, and is a big reason why Temu can provide customers with quality products at unbeatable prices since manufacturing costs tend to be lower in China. The platform also works with a diverse range of local manufacturers, sourcing from producers with the most competitive prices to keep the price down.
Temu’s shipping strategies overall enable it to be a cheaper platform compared to other retailers. The downside is that it is extremely slow, especially compared to Amazon. The company works with a vast network of air transport providers, chartering cargo planes to send parcels directly to its consumers at low prices.
On top of that, Temu has been able to fully utilize the established ecosystem built by Pinduoduo and learn from its successful sister company to capture the economies of scale to enhance production while reducing costs.
On average, Temu ships around 4,000 tonnes of cargo a day. To give context, Apple, one of the largest tech firms in terms of sales volume, ships around 1,000 tonnes of cargo a day. Temu’s large sales volume helps with the transport economy, making parcel deliveries as cheap as possible without impacting product quality.
How Reliable is Temu?
Despite being a legit online store, Temu is not accredited by the Better Business Bureau (BBB), a Virginia-based NGO focusing on marketplace trust. There are over 2,000 customer complaints on the BBB website about Temu’s unresponsive customer service, undelivered packages, and products that do not match descriptions or arrive late.
Melanie McGovern, the director of public relations and social media for the BBB, told TIME Magazine in 2022 that Temu caused concerns for consumers as the platform often failed to deliver within the promised time frame.
Despite the concerns from customers, Temu continued to gain a huge market share since it was founded in September 2022. Up to January 2024, the platform gained over 51 million active daily users, directly causing the number of active daily users of its major competitor, Amazon, to fall by 2.6 million.
The large user base demonstrates Temu’s growing strength in the US ecommerce sector and consumers’ trust in the platform. Overall, most customers get their packages delivered from Temu within the specified time period.
How Long Does Temu Take to Ship?
As stated on the official Temu page, all orders are eligible for standard shipping for free with an estimated shipping time between 6 and 22 days. Express shipping, which takes roughly 4 – 11 days, is available for free for orders over $129 or for $12.9 for orders below $129.
Temu’s deep network of logistic partners gives customers peace of mind with reliable deliveries. By enlisting chartered cargo planes, the platform is able to significantly shorten delivery time despite not having US-based warehouses.
What Does “Temu” Mean?
According to Temu, the company name means “Team Up, Price Down”, which is the company’s motto. It reflects Temu’s commitment to working together with manufacturers and consumers to deliver quality products affordably.
Its logo is a rounded square, also known as a “squircle”, in bright orange to arouse positive and joyous feelings in customers. The first row features four elements – a dress, a rocking horse, a high heel, and a lady’s handbag – things that represent Temu best. The icons illustrate Temu’s ability to offer diverse products.
Underneath the four icons is the capitalized company name “TEMU”.
The Future of Temu
The rise of ultra-fast fashion companies has changed consumption habits globally. In 2024, Temu continues to dominate the industry by providing fast deliveries and affordable products to customers.
Mastering the lessons learned from its sister company, the international online store fully utilizes the Consumer-to-Manufacturing model, minimizing transport costs and enhancing efficiency. Its comprehensive customer care program is also attractive for new users as they are entitled to free returns if the products do not meet expectations.
To gain US customers’ trust, the Boston-based firm also invested millions in advertisements through the most popular US events/channels like Super Bowl and Meta, building up a positive reputation and infiltrating the local market better.
However, as concerns grow about the company’s ethics with the alleged involvement of forced labor in its supply chain, there may be possible sanctions and regulations hindering the growth of the online store in the near future.