James Marshall of Wired reports that despite the arrival of new competitors and growing political tensions between the U.S. and China, the e-commerce juggernaut Temu proved in 2024 that it’s here to stay. Marshall writes:
Love it or hate it, you have to admit Temu had a banger year. Launched in late 2022, the Chinese-owned ecommerce site, known for selling a vast array of astonishingly affordable goods, took only two years to become a household name in the US. Over the past 12 months, it has topped download charts, surpassing other viral apps like ChatGPT and Threads, and now operates in dozens of countries around the world. Even its biggest rival, Amazon, recently introduced a Temu clone called Amazon Haul that closely resembles the original, both in terms of its logistics supply chain and user interface.
Temu is projected to earn more than $50 billion in total sales this year, according to analysts from AB Bernstein and Tech Buzz China, potentially tripling its 2023 figure. Temu’s website now gets nearly 700 million visits worldwide every month, and Apple recently revealed it was the most downloaded app of 2024 on iPhones in the US. […]
Temu managed to pull it off because it exploited a few areas of untapped potential, says Weigel. On the buyer side, it targeted price-conscious shoppers living in a time of high inflation. On the seller side, it scouted out Chinese factories that needed to keep their production lines running, but had no idea how to enter overseas markets. To connect them, Temu figured out it could take advantage of the so-called de minimis rule to send items affordably through air cargo directly to customers’ doorsteps. The provision allows people to send packages to the US duty-free as long as the goods inside are worth less than $800. […]
How the rise of Temu and Shein created a logistical nightmare for the air freight industry
The days might be numbered for the de minimis exemption. The White House announced in September that it would crack down on “abuse” of the provision, citing a sleuth of reasons ranging from intellectual property violations to fentanyl smuggling. It’s not clear yet how exactly the regulation might change—lawmakers may get rid of it completely or lower the price threshold—but a fix could be finalized before president-elect Donald Trump takes office next month. […]
The possibility of being blocked in the US is real for Temu, but Weigel points out that there’s less of a political urgency to act on an ecommerce platform than a social media one that has elicited concerns about things like artificial intelligence and disinformation. “While there is a bipartisan consensus that people are concerned with the implications of China’s tech rise, the incentives to police Temu are lower than TikTok,” she says. The Chinese ecommerce vendors she has spoken to don’t seem very concerned either. “These people are very nimble and flexible. My sense was that it was a thing people were curious about, but not something they were afraid about,” Weigel says.
After all, Temu’s aggressive expansion into other markets gives them plenty of alternative places to find customers if things get really ugly between the US and China. On a recent trip to Shenzhen, Weigel says she met a woman who heads a cross-border ecommerce industry association. One of the first things she told Weigel: “We don’t necessarily make the American and the European markets our top priority.”
Read more here.
