Temu to open site to US third-party vendors

Chinese generalist budget e-tailer Temu, as much criticised as it is dreaded in the USA, is reportedly about to open its site to US third-party vendors. A way to both compete with local e-tailers and generate goodwill with US businesses. Temu’s strategy also heralds the course the e-tailer is likely to follow in Europe, where it launched last spring.

The fact that Temu, owned by Chinese group Pinduoduo, is opening to US vendors was reported by the Wall Street Journal, which underlined that this will further intensify competition between e-tailers, as they vie to attract new vendors. Sites like Etsy and Wayfair are likely to be most affected, besides more established operators like Amazon, and retailers like Walmart, Target and Macy’s.

Last year, before opening to US vendors, Temu racked up sales worth over $9 billion on the American market, where it caught the public’s eye also by grabbing one of the highly coveted TV advertising slots during the Super Bowl. 

It remains to be seen whether this will be enough to attract US vendors who, both for pricing and image reasons, may not necessarily be keen to see their products promoted amidst scores of ultra-cheap Asian goods.

On the other hand, attracting US vendors could be a way for Temu to secure its local audience’s loyalty. A survey by KeyBanc recently found that 30% of Temu customers that visited the site in September returned the following month. The figure dropped to 14% in December, indicating interest was waning only 16 months after the e-tailer entered the USA.

The latter market has until now acted as a testing site for strategies that would later be deployed in Europe. The EU is another Western market in which Temu, over the course of a few months, climbed into the top 10 of the biggest cross-border e-tailers. The Chinese site ranked in fact ninth in the annual table drawn up by Cross-Border Europe. The question is when will Temu open to European vendors.

Meanwhile, the e-tailer is much criticised in the USA as the source of a massive influx of freight into the country. According to Cargo Facts Consulting, 4,000 tons of Temu packages are shipped every day to the USA, directly contributing to log-jamming air cargo operations over the Pacific. Last June, a US Congress report estimated that Shein and Temu were jointly responsible for 600,000 packages entering the US on a daily basis, by taking advantage of a customs loophole.