How to Skyrocket Your App to the Top: Unveiling the Success Secrets of Temu

Temu's low-cost model

Temu's rapid expansion is based on low costs. Its price is lowered by the merchants. In fact, a more accurate term should be "manufacturers," because Temu's real target customers on the business side are not individual sellers at all, but factories. Temu's model is a kind of self-management model: Temu is responsible for commodity pricing, marketing, customer acquisition, and fulfillment, and the merchants, as suppliers, only need to prepare the goods for the warehouse, which forms a "supply chain-platform-overseas consumers" transaction chain. The more links in the supply chain, the higher the cost, and Temu's approach is to shorten the supply chain as much as possible and direct supply from the source.

For example, on the general e-commerce platform, it is the seller to opens a store, looking for factories to get goods on the shelves, and then the platform is responsible for delivery. But Temu skipped the individual seller, directly with the factory. Factories do not have to do anything except supply, because Temu shelves, marketing, logistics, after-sales package deal. Even the price of goods is not set by merchants, but by Temu. Temu has a strict price review mechanism. If a merchant's offer for a commodity on Temu is higher than the price of a similar commodity on the domestic wholesale e-commerce company 1688, the platform will let the seller make a new offer. Therefore, even if the selling price is very low, Temu can still earn the price difference, which is the core business logic of Temu.

Relying on the business logic of low prices, Temu is rapidly eating up the market. Some sellers compare Temu with Amazon and find that the price of the same product on Temu is only half the price of Amazon, which is to a certain extent a downgrade blow to Amazon sellers. An institutional survey shows that 99% of small and medium-sized Amazon sellers plan to open stores to sell on other e-commerce platforms in 2023. Some sellers said that under the impact of Temu, Amazon sales began to decline, and there was even a weekly decline of 30%-50% in sales.

Paid Advertising

In less than a month after Temu's launch in the U.S., the number of downloads went straight to the top of the App stoore and Google App Store charts because of its digital marketing strategy, including ASA, Paid Search Ads, Paid Social Ads. According to industry insiders, Temu spent 1 billion RMB on marketing in the U.S. market in the first month of its launch. And this 1 billion RMB is just the first step of a small test, Temu's marketing budget this year is as much as 7 billion RMB, equivalent to 1 billion dollars. This number is still relatively reliable, because Tiktok in 2018 alone smashed $1 billion a year in advertising and marketing in the United States, which led to its rapid rise to become the highest monthly download and install app in the U.S. that year, with 80 million downloads.

Multi-channel distribution

Use money where it is needed most. Temu chose the platforms with the highest traffic from all channels to place ads.

• Social Media Channels

Temu chose Facebook to launch a "Credit Giveaway" campaign, allowing platform users to earn rebates and help them promote their products. Since January 2023, Temu has placed approximately 8,900 ads on Meta's various platforms. The adjusted growth effect was outstanding. In the same month, Temu had 74.52 million visits and a turnover of $200 million.

• Short video channels

Temu chose TikTok to place, and the route is similar to Shein, because both are engaged in netroots seeding. For example, Temu teamed up with influencers to launch interactive activities such as try-on haul, unboxing and trying on cross-dressing, which attracted a lot of young users.

• Long video channels

Temu opted for Youtube distribution in the form of branded extended audio and podcast ads. For example, one of the ads features an "employee" questioning the owner's pricing, which is so low that people will think it's fake. The boss says, "We're a big international brand and we should establish a price advantage. It looks like a simple production, but it's very grounded.

• Offline Channel
  
  

Temu chose the Super Bowl. In February, Temu spent $14 million on a 60-second advertisement on the Super Bowl, a top event, which made 208 million U.S. viewers remember Temu's slogan: "Shop like a billionaire". That night, Temu saw a 45% increase in downloads and a 20% increase in daily active users, with no lag or crashes. Continued popularity also allowed Temu to surpass major U.S. retail giants like Target in app downloads in early February.


It is clear that Temu's success cannot be separated from its precise strategy, bold financial commitment and rapid iteration in the industry. The combination of multiple factors has propelled Temu as a powerful force to embark on its globalization journey. Want to be the next Temu？ Focus on Paid Advertising！

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