Barely two years after its launch, Temu has already conquered the international market. But its commercial strategy raises questions, as the Chinese e-commerce giant would lose money on every order. First, Chinese suppliers sometimes struggle to make a margin. Reporting from Zhejiang.
With more than 160 million monthly users, Temu has quickly become the world’s number two, just behind Amazon.
The recipe for their success is simple: you can get everything at low prices. But this aggressive approach comes at a cost. According to analysts, Temu’s business model is not sustainable in the long term. The company sacrifices its margins to prevail against the competition, or even to mitigate it.
For Chinese exporters, the platform has become indispensable, offering an international exhibition for made in China, while the domestic market is at half mast.
Almost non-existent margins for suppliers
From Zhejiang on the southeast coast of China, Tikmans Trading supplies menswear to the world. The company sells its products on platforms such as Shein, Amazon, and Temu, where it has been present since 2023.
Minimalist design and AI to stay profitable
To remain profitable, it invests little in design and relies on artificial intelligence. His team finds photos of foreign influencers on the internet, integrates them with software, and thus creates 120 new clothing models every month. Through this process, it takes them less than a week to go from designing to shipping new garments.
So, for Jie Weibo, this is still a good deal, because since selling on Temu, his orders have increased by 50%.
TV content: Yena Lee/Vivane Gabriel/Charlotte Onfroy-Barrier
Web adaptation: Miroslav Mares