Temu is the new buzz in town, and why wouldn’t it be?
The platform offers incredibly low-priced products shipped directly from China, making it a popular choice among consumers; Australian buyers also love it!
The increased customer interest and influx on Temu eventually impacted Australian sellers and marketplaces. This new player has hit the Australian e-commerce landscape, causing ripples that may turn into a tsunami.
Some of our partners in Australia have been asking recently if we are experiencing problems with the new marketplace, and how we’re fighting the competition.
So, let’s tell you what Temu is and how you can thrive in these challenging times.
What is Temu?
Temu is an online marketplace that launched in the US in September 2022. It sells a wide range of items from fast fashion to electronics and more, all at rock-bottom prices. Headquartered in Boston, Temu is owned by PDD Holdings, a Chinese company listed in the US stock market. It is also the parent company of Chinese ecommerce giant Pinduoduo.
Temu is a localized improved version of AliExpress; it is actually another Chinese e-commerce giant entering the Western world with a low-pricing strategy.
It offers an extensive range of products, priced affordably with free shipiping. You might come across genuine as well as look-alike products that may look like other brands but are not theirs. Often buyers get tricked into buying those because of similar branding and packaging.
The platform uses constant clearance sales, aggressive social media advertising, and referral offers, besides low rates and free shipping, to attract customers. The website is fairly gamified, showing different discount coupons, spin wheels, and countdown clocks to make them feel like they might miss the offer. While other platforms use similar techniques, Temu’s offers are irresistible.
How is Temu Impacting the Australian Online Marketplace?
Temu started great in the US and is gaining massive traction in Australia as well. A significant number of Australian buyers are moving to Temu for their online purchase needs.
Since its launch in the Australian market in March 2023, Temu has attracted over 9 million Australians to its web and app platforms. Lured by Temu’s incredibly low prices and free shipping strategy, almost half of Australia’s population is moving to this platform to spend their money instead of the local marketplaces.
This new challenge may seem daunting for sellers on local platforms like Catch, Kogan, eBay, and Amazon.
If you are a dropshipper sourcing everything from China, you might face the worst situation when Temu is offering products at such low rates with free shipping.
So, how can you navigate this new competitive landscape and sustain your business when Temu is expanding its wings?
Outmaneuvering the Temu Tsunami Strategies for Australian Ecommerce Success
Temu thrives on providing low prices for lightweight items they can ship cheaply from China. However, they are not dealing with larger and bulkier products yet. So, focusing on medium and large-sized products over 1 kg can help you differentiate and stand out by offering cost-effective solutions.
When people search for large items on Temu and are disappointed, they are more likely to visit local marketplaces. This is your opportunity to shine by offering items you can easily ship within Australia at affordable prices.
It will help you divert the audience and allow you to boost sales. Eventually, successful orders will build a positive reputation, encouraging buyers to purchase from you again.
Temu’s customers are attracted to low prices, especially when buying non-branded products. So, offering the same products at higher prices (due to additional costs) will not help your business. Instead, people will choose Temu as a cost-effective choice. However, you can benefit by branding.
While Temu is a favorite for non-branded products, customers hesitate when buying premium products; a 2.6/5 rating on the Better Business Bureau depicts their experiences.
So, building a brand identity can help you build customer trust and loyalty by providing them with high-quality, premium products. It encourages consumers to buy from you for your brand promise and quality, not just the pricing. Especially if you deal with products above Temu’s shipment requirements now (large products), it is perfect!
Brandification is also critical to fighting declining sales on Australian marketplaces.
Localization is another important factor when it comes to dropshipping, as it enables you to offer better service to consumers. Temu may offer low prices but cannot beat local delivery times.
Shipping from China typically takes 10 to 14 working days. Meanwhile, local businesses can deliver within 2 to 5 days.
So, if your business can offer faster delivery to local clients, you can drastically improve your customer’s buying experience. Despite the competition, product safety compliance requests will be stricter when selling on Australian marketplaces.
The rise of Temu teaches us that the ecommerce industry is ever-changing. But remember that change brings opportunity. You can turn these challenges into advantages with the right strategy and a strong supply chain partner like Wefulfil.
While Temu is making it difficult for sellers to boost sales on Australian marketplaces, Wefulfil can help you maintain supply and sales on local marketplaces.
Temu is a growing e-commerce business like Shein, penetrating the Australian consumer market rapidly and attracting a large number of consumers. Over half of Australians are moving toward Temu because of low prices and free shipping. You can combat the competition by focusing on differentiation, brandification, and localization. Temu deals with smaller products only, enabling you to benefit by selling large products people cannot find on the platform. Similarly, offering faster shipment through warehouses in Australia can also give you an edge over Temu.
So, if you have been struggling to attract customers when Temu has such lucrative offers, don’t worry now. Focus on building your brand, niche down, sell larger items, and ensure timely shipment; you are ready to succeed!