Temu has been a global phenomenon in ecommerce since it began operating in September 2022. It began operations in the United States, specifically in Boston, Massachusetts. The company assured LR that its business model is based on electronic commerce, linked to a business “factory direct that connects consumers with manufacturers.”
The company assured that, as of May 24, they had a presence in 68 markets in America, Europe, the Middle East, Asia and Oceania. In the Latin American market they are present in countries such as Chile, Mexico and Colombia. “We allow our customers to purchase a wide selection of products at wholesale prices. “Our goal is to expand consumers’ access to quality products and affordable prices so they can live their lives better,” the company said.
It is important to note that Temu does not have physical stores, because it operates as an online marketplace. It is owned by PDD Holdings, a company that has a market valuation of US$204 billion. The company made a marketing investment of close to US$2 billion last year.
Clara Inés Pardo, a trade expert, explained that this type of business is extremely attractive because it is a mix of strategies in the sales channel, market penetration, innovation in marketing, in addition to other important factors such as an intensive marketing and advertising strategy. digital.
“The combination of variety, accessibility, convenience and innovation in marketing makes them an attractive and growing business model,” said the expert.
Temu confirmed that it entered the Colombian market in March, a period since which they received positive feedback from consumers. “These comments indicate that we are on the right path and align with our core mission: to offer high-quality products at affordable prices to all consumers,” the company said.
How does the business work?
Temu brands itself as an organization that connects consumers directly with sellers, who are largely the manufacturers of the merchandise sold. The model eliminates intermediaries, which eliminates associated costs. They highlight that the model generates an optimization in inventory management by reducing waste by minimizing the number of warehouses through which a product circulates. “This approach democratizes access to quality products at affordable prices,” Temu said.
Pardo assured that, in effect, the low prices of this business model are due to a reduction in intermediation, which is why there is a direct link with production and the client. “The way you innovate is by reducing costs that translate into the marketing price,” he explained.
Temu said the company is willing to comply with the laws and regulations of the markets where it operates. “We hope that our platform becomes more and more recognized.”
