Temu Likely to Face Tougher Online Content Rules as EU Users Soar

Less than two years after its US debut, Chinese e-commerce upstart Temu is attracting more repeat shoppers than eBay Inc., an e-commerce pioneer that has been around for almost three decades.

An April survey of 1,000 consumers found that 34 percent of respondents buy something from Temu at least once a month, edging out eBay’s 29 percent. Amazon.com Inc. remains the stand-out leader, with more than three of four respondents saying they shop there at least once a month, according to London-based online marketing firm Omnisend, which conducted the survey.

Temu, a division of PDD Holdings Inc., has been advertising and discounting heavily to lure customers, who order products directly from China and typically wait a week or more to receive them. The company has aired two Super Bowl ads with the tagline, “Shop like a billionaire” and is omnipresent on social media. Burning money on expensive marketing and profit-eating discounts is a well-worn and risky start-up strategy. The key to longevity is compelling first-time customers to become loyal shoppers — and Temu, so far at least, seems to have cracked the code.

“It just shows how Temu’s aggressive marketing — like Super Bowl commercials and social-media campaigns — is paying off,” said Greg Zakowicz, a senior e-commerce expert at Omnisend, which conducted the survey to compare sentiment about incumbents like Amazon and Walmart Inc. with perceptions of Chinese upstarts like Temu and Shein. The margin of error was plus or minus 3 percentage points.

A post-pandemic surge in prices ushered in some major shifts in consumer behaviour, making it a good time to take the pulse. As recently as 2022, more than half of US shopping journeys began on online marketplaces such as Amazon, according to an annual survey by EMarketer. Last year, only 40 percent of shopping trips started there. Almost 30 percent of shoppers began their shopping on search engines like Google’s, up from 25 percent in the previous year.

The shift to search engines shows how deal-hungry shoppers want to browse across multiple retail websites and platforms to compare prices, opening an opportunity for start-up discounters.

In a statement, a Temu spokesperson said: “We’re encouraged that Temu’s direct-from-factory model is trusted by US consumers for affordable products” and added that the company performs spot checks and other measures to address quality issues. An Amazon spokesperson said the company continually innovates “to offer the best selection, value, and convenience, with low prices and fantastic deals, fast delivery and a range of compelling Prime member benefits,” adding that for seven consecutive years Amazon offered “the lowest prices among all major US retailers,” according to an independent study. EBay didn’t respond to a request for comment.

Omnisend also asked respondents to rank sources of dissatisfaction with each marketplace, with choices including prices, poor product quality and long delivery times. There were sharp contrasts between Amazon, which scored poorly on prices, and new discounters like Temu, which were dinged for product quality and delivery speed.

Pricing was the top source of consumer dissatisfaction with Amazon, suggesting that deals — not speedy delivery — have become more of a priority for a significant percentage of inflation-battered consumers. That could be troubling news for a company that has spent tens of billions of dollars to ensure that customers receive many products in two days or less.

By Spencer Soper

Learn more:

Germany Backs Ending EU Tax Break That Helps Shein and Temu Keep Prices Low

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