Why customer experience is a key driver of adoption for Temu
Temu – the shopping app and e-commerce platform from Chinese e-commerce giant Pinduoduo – is probably the most popular downloaded (in the US) app you never heard of. Yet, it currently has more downloads than Amazon, TikTok, Instagram or even Shein.
So what is?
Offering cheap factory-to-consumer goods, Temu sells a wide range of products, including women’s and men’s clothing, kids fashion, jewelry, accessories, shoes and bags. The nature of the products and their prices are very diverse and website looks a bit like a virtual dollar store.
How has it become so popular in such a short time?
1. Superagressive marketing
People in the US have been seeing Temu adverts everywhere, over social media as well as in their Gmail inbox. This is pretty much the same approach of TikTok which drove its early growth via excessive marketing spend too. In 2018, for instance, TikTok spent $1 billion on ads, even becoming Snap’s biggest advertiser that year.
According to Meta, Temu has run some 8,900 ads across Meta’s various platforms in January 2023. The ads promote Temu’s sales and its extremely discounted items, like $5 necklaces, $4 shirts, and $13 shoes, among other deals. Earlier this month, Temu even made its Super Bowl debut, with an advertisement that showed viewers how they could “shop like a billionaire” on the platform.
Here’s that advert:
2. The network always wins
The clever part about their marketing is that they do not just massively push ads over many different channels. They also understand that marketing is social, about relationships. So it launched a campaign on social media in which the more users convince others to sign up, the more credit and discounts they earn. This has enabled some people – who have earned enough credit – to receive goods without even giving Temu their credit card information.
But their understanding of the power of the network, goes beyond social marketing, users can also join group deals with strangers to secure discounts on premium items like expensive skincare products and iPhones. In fact, that is where the name Temu comes from: “team up, price down.”
3. Incredibly cheap
Just like Shein, Temu follows a factory-to-consumer – cutting out the middle men – model that keeps prices low. Rather than shipping goods stockpiled in its own network of warehouses, as competitors like Amazon do, Temu connects manufacturers directly to sellers. The downside is longer shipping times, but it is also pretty transparent about the 7-to-15-day wait. The upside, of course, is that it can offer products at a much lower price seeing that it does not need to invest any budget in warehouses. It’s a smart trade-off, especially in times of inflation, where cheap prices can really make a difference.
The reason why such a new brand as Temu has such a deep and efficient supply, capable of delivering inexpensive products directly from factories to consumers, is the success and network of parent company Pinduoduo in China, of course.
However, to be honest, Some people are questioning if this strategy is durable. “This model of relying on ads to drive every transaction does have an expiration date, and that’s what unfortunately caused the demise of Wish,” explained e-commerce analyst Juozas Kaziukėnas. “At one point, ads will probably become too expensive and too inefficient to justify the costs.” That is why the super-cheap pricing strategy is probably all about gathering as much market share as possible in a short time rather than a long-term play.
Another challenge might be quality. Other discount shopping apps saw similar growth but at one point, consumers will find out that if a pair of jogging pants costs 8 dollars, it might very well not be qualitative, … or ethically produced.
4. Artificial Intelligence
Temu’s marketing strategy is not just about visibility, it’s also about gathering insights and becoming smarter. A lot of Chinese apps tend to have really killer algorithms which make the user experience highly addictive. Having a large number of early customers has helped train Temu’s recommendation algorithms and create personalized product lists that are as addictive as TikTok’s “For You” page. While Temu is nowhere near TikTok’s sky-high figures, it really does appear to be leveraging a similar growth strategy.
Temu also has a “Selected for You”, page and puts heavy emphasis on recommending shops and products on its homepage, which is informed by user data and usage. And of course, the more people will use it, the better the recommendations will be on what kind of products you will see in this virtual shopping street.
5. It’s fun
But that stickiness does not only have to do with AI and clever algorithms, Temu is just an overall fun experience, because it cleverly uses gamification and fun incentives. And you know that I’m a big fan of that approach, always advising brands to “make it fun”, focus on 100% feel good (I call that the Top Gun Effect) and pure joy. And gamification fits that method to a tee.
First of all, its strategy of giving free stuff to users who promote the app on their social networks and get friends and family to sign up, already feels like a fun approach, but it also takes the game part even further. For instance, users that regularly purchase fishing food, can win a free product of their choosing through a game, by tapping on a floating bag of fish food on their phone screen in the Temu app. To get even more fishfood in the app, the user needs to refer a new user to the app. In other words, referrals are the secret ingredient to winning the games and get more free products.
39-year-old Ashlee Nordquist, an optician in Fargo, for instance won many freebies by making referrals and playing Fishland as well as other games on Temu: a family hotpot-and-grill combo, a small hotpot-and-grill combo (she found the first one too big), a camera drone, a storage organizer, and a meat slicer. Most recently, in February, her fish-feeding routine landed her a free guitar — a gift for her friend’s daughter. Several of her friends have become avid Temu users and even created a group chat to exchange gaming tips.
We’ll have to wait to see if Temu will become as popular as TikTok or even as Shein, seeing that it has quite a few challenges to overcome, but I believe that companies over here can learn quite a lot from it’s smart, social and fun approach to marketing and CX.