While browsing popular social networks like TikTok and Instagram, you must have come across advertisements for products from the marketplace Temu. Perhaps you’ve even ordered something from the site, paying only a small amount.
Over the past two years, Temu has become the most downloaded shopping app, surpassing the sales king in the US market – Amazon. After 30 years of dominance, Amazon boasts over 160 million Prime customers, while Temu, since its launch in September 2022, has over 104 million active users, with a sales forecast of $60 billion by 2024.
Statistics Original Source ›››
If you haven’t heard of Temu and aren’t aware of how it’s rapidly attracting Amazon’s customers, this article will address your questions regarding the rivalry between these leading marketplaces and how Amazon plans to compete with its main contender – the Chinese Temu.
What is Temu?
Temu is a massive online marketplace where you can discover almost any product imaginable. Whether you’re looking for car accessories, clothing, kitchen appliances, electronics, outdoor furniture, power tools, or baby clothes, Temu has it all.
Launched in the US in late 2022 and owned by PDD Holdings, a Chinese company, Temu has quickly become known for its low-cost products, relentless marketing, and a shopping experience that’s both fun and interactive.
While often compared to platforms such as Shein, Wish, and AliExpress, Temu distinguishes itself through its vast product range. In contrast to Shein’s specialization in fashion and clothing, Temu lets you shop for a variety of items all in one place.
Amazon Vs Temu: Why Customers Switch to Temu?
It’s no secret that the primary factor behind Temu’s rapid growth and customer acquisition is its low prices. Imagine if your city only had boutiques, and suddenly a supermarket opened with a similar range but at very low prices.
Prices on Temu are often 2-3, or even 10 times lower than similar products on Amazon. Naturally, such a market player immediately grabs customer attention, as price is often the main factor in the decision to purchase or decline a product.
For example, a charging station for Apple devices costs between $20 and $50 on Amazon (depending on specific features), but a similar station on Temu is about $10. Thus, a buyer pays almost half for the product on Temu compared to Amazon.
The entry of such a serious competitor is risky not only for Amazon, but also for its sellers. If you are one of them or are considering joining the ranks of Amazon sellers, it’s crucial to understand how Temu rose so quickly and what it means for you.
Why is Temu So Cheap?
Temu’s Superior Logistics
Despite Amazon’s $600 billion in sales last year, Temu is quickly closing the gap. But what makes Temu stand out from a seller’s perspective?
If Amazon’s model is Supplier → Seller → Amazon Warehouse → Customer, Temu eliminates intermediaries: products go directly from low-cost Chinese manufacturers to US consumers.
The success of this model is partly because the supplier might not even have the product in stock. What does this mean?
Imagine Temu sellers receiving hundreds or thousands of orders daily and only starting production after receiving an order. Thus, Temu sellers avoid the costs Amazon sellers face: producing, shipping to Amazon warehouses, and only then selling.
With Temu, the supplier can start the production of goods only after receiving an order. Thanks to high traffic, they can produce large quantities where each new unit costs even less than the previous one.
This gives Temu significant tax advantages when importing goods to the US. They avoid high tariffs, customs duties, and FBA index fees on products.
In contrast, Amazon sellers import in bulk, pay FBAX, customs duties, storage fees, and more. And if you add the production costs, which are higher than in China, it turns out that Temu can always offer a lower price on products.
Temu’s Gamified Interface
Temu also retains customers through its app’s gamified interface. The marketplace offers discounts, prizes, and more, encouraging users to spend more time and money. Honestly, Temu often gives users the impression of gambling at a casino rather than making purchases on a marketplace.
Temu’s smartphone app features interactive elements like spinning wheels and mystery envelopes that pop up from time to time, allowing users to win coupons and discounts.
While winning these games is often assured, there’s a catch: you can’t really collect these coupons unless you fulfill a special requirement enforced on you by the Temu marketplace.
For instance, you need to purchase a certain item from your shopping cart, which could often not even be the product you actually want to buy. But what if you did and received that $200 temu coupon bundle: sounds like a big deal, doesn’t it?
You would be correct to guess that Temu doesn’t play by the western shopping rules. For many buyers who have previously ordered from Chinese marketplaces, this wouldn’t come as a surprise that most of these coupons can only be redeemed on purchases over a certain amount. After all, it says “bundle” next to the coupon, meaning it could be $0.10 off a $5 purchase, $10 off $300, and so on, until you run out of money limit listed on the Temu coupon.
But will you ever? That is highly doubtful.
How is Amazon Better than Temu?
Amazon's Faster Delivery
It’s hard to disagree that Amazon’s main advantage is its delivery speed. Products from Temu can take up to several weeks to arrive, whereas Amazon often guarantees delivery within 1-2 days, and sometimes even 8 hours.
Agreeably, when you need something urgently, you’re unlikely to consider the price difference when you can receive your item promptly.
However, it’s important to remember that there are plenty of buyers willing to sacrifice speed for a lower price. Moreover, there are quite a few such people. If a product is not meant to meet an urgent need (for example, a household item), many find it easier to wait an extra couple of weeks to get it at a much lower price.
Amazon's Customer Retention
Poor product quality, low level of customer support, and long delivery times all lead to the number of repeat transactions on Temu being significantly lower than on Amazon. According to research, only 26% of users make repeat purchases on Temu within 12 months of their first transaction.
In the same period, the number of repeat purchases on Amazon is 56%, achieved thanks to Amazon Prime subscribers, of whom an impressive 97% renew their subscription annually.
Temu Sales vs Amazon
Temu reported an impressive $20 billion in sales during the first half of 2024, already surpassing its total annual sales of $15.33 billion from 2023.
A detailed quarterly analysis of Temu’s retail sales, beginning in Q4 2022, highlights this significant growth.
Looking ahead, Temu is projected to achieve a remarkable $54-60 billion in sales by the end of 2024.
Temu vs Amazon: Customer Trust
People trust Amazon much more than Temu. But here’s the surprising thing — despite the low trust, lots of people still shop on Temu.
Globally, only 6.4% say they trust Temu over Amazon. But even so, 48% have bought something from Temu in the last year.
Temu vs Amazon: Return Policy
A survey conducted among US customers shows that most consumers consider Amazon’s return policy superior, however almost 40% think that Temu’s return policy is of the same quality.
Why is Amazon Better for Clients than Temu?
Amazon FBA remains a very viable way to conduct business using the private-label model, and we do not think this type of business will lose its relevance in the near or long term. On the contrary: more users are turning to online shopping and prefer fast delivery, easy returns, and the specific product range that Amazon offers.
It’s important to understand that the quality of products on Temu does not match those sold on Amazon. Amazon’s target audience consists of customers who prefer to be confident that they are not wasting their money and are purchasing quality products.
How to Sell on Temu?
In early 2024, Temu announced its initiative to support EU and US sellers in listing their products on the Temu app. They can choose from direct fulfillment or a model similar to Amazon Fulfillment .
Following this announcement, Temu has begun integrating US sellers into its platform. Here’s what you need to do to get started on Temu:
1. Create a Seller Account
〉 Visit the Temu website or seller center and select the “Sell on Temu” option.
〉 Fill out the registration form with your business details, such as company name, contact information, and tax ID.
- Existing Pinduoduo Sellers: Register directly through your Pinduoduo account for a faster process.
- New Sellers: Email Temu at [email protected] to request a seller code and start your application.
2. Verify Your Account
Once you’ve submitted your registration, the verification process begins and typically takes a few days. Here’s what to expect:
〉 Receive Seller Code: After your application is approved, Temu will send you a seller code via email.
〉 Submit Verification Documents: Prepare and upload the required documents to confirm your business legitimacy and product compliance. These documents may include:
- • A valid business license;
- • Your tax identification number;
- • Product certifications, if applicable;
3. Set Up your Seller Account and List Products
〉 Customize Your Storefront: Add a memorable store name, a professional logo, and other branding elements to make your store stand out.
〉 Complete Profile Details: Upload high-quality images, write a detailed business description, and highlight what makes your brand unique to attract attention.
〉 Create Product Listings: Add detailed descriptions, competitive pricing, and clear, high-quality images that showcase your products effectively.
〉 Optimize Listings: Use targeted keywords in product titles and descriptions to improve search rankings and ensure your listings meet Temu’s compliance guidelines.
4. Choose Fulfillment Method and Monitor Performance
Decide whether to ship orders yourself or use Temu’s fulfillment services. Afterwise, frequently review your seller dashboard to monitor sales and assess overall performance.
How Much Does it Cost to Sell on Temu?
Selling fees are a key consideration for anyone looking to sell on Temu. Sellers should be prepared to manage various costs, including the following:
Fee type | Details |
Listing fee | $0. Sellers can add items without paying any listing fees. |
Referral fees | A small percentage of each sale, typically between 2% and 5%, is deducted as a referral fee based on the final sale price. |
Subscription fee | Individual sellers can start selling for free. However, business accounts are required to pay a monthly subscription fee of $39. |
Payment processing fees | Payments are handled via PayPal, which applies a standard processing fee of 2.9% plus $0.30 per transaction. |
Fulfillment fees | If you choose Temu’s direct fulfillment service, fees are calculated according to the size and weight of your items. |
Shipping fees | Customers enjoy free standard shipping, but sellers are responsible for shipping costs. These vary depending on the dimensions and weight of the products. |
Amazon Launches a Discount Store to Fight Temu
On November 13, 2024, Amazon made a major competitive move and launched a low-cost store, Amazon Haul, which is essentially an alternative to Chinese giants like Temu and Shein.
This new store offers a diverse range of fashion, lifestyle, and home products, all priced under $20, with a special focus on items under $10. By providing free delivery on orders over $25, Amazon Haul seeks to attract customers with both cost savings and convenience, promising delivery within 1-2 weeks from its warehouse in China.
Competitive pricing is a hallmark of Amazon Haul, where shoppers can benefit from additional discounts: 5% off on orders over $50 and 10% off on orders exceeding $75. The return policy is equally customer-focused, allowing free returns on purchases over $3 within 15 days, supported by over 8,000 drop-off locations including Amazon Lockers and Whole Foods.
If you want to take a look at this newly opened Amazon Haul, all you have to do is update your Amazon app. As a mobile-only experience, it can be accessed by searching “Haul” within the app, using a direct link, scanning a QR code (if you visit the page from PC), or navigating from Amazon’s main menu.
This store operates independently, offering its own unique search, shopping cart and checkout processes, ensuring a distinct and user-friendly experience.
How is Amazon Haul Different from Temu?
Compared to Temu’s “slot machine” interface cluttering your vision with endless wheels and deals, Amazon Haul’s design is quite moderate. But that’s not something we’d like to point out, but instead concentrate on the absence of such important features as:
1. Customer Reviews;
2. Product Description (to be more precise, shortened to just a few sentences);
Basically, Amazon has made buying a product on Haul completely effortless, removing any second-guessing. The only element representing the quality of a product is its photo, and price serving as an incentive to make a purchase.
Is Amazon Haul Better than Temu & Shein?
Right now, it’s hard to judge the effectiveness of Amazon’s attempt to beat Temu and Shein, provided that Amazon Haul has just launched and there’s not enough statistics, reviews, or other evidence available. However, a number of buyers express concern that you shouldn’t expect much from it, as the products featured on Amazon Haul are of the same low quality as what many refer to as “Chinese junk”.
Other customers, however, view this new store as an opportunity to rid Amazon of certain items. It’s no surprise that Amazon, for quite a while now, has been suffering from the “contamination” of cheap, Chinese-made unbranded products that end up on the platform. These items are not only of poor quality, but often make us play a guessing game: what purpose are they even made for? If you’ve ever been a part of the Amazon Vine Reviewer program, you must know what we mean.
Buyers believe that Amazon Haul is just the right place for such products, and moving them there would allow Amazon’s main platform to focus on higher-quality goods or better-curated selections. It’s almost as if Amazon Haul is designed to act as a clearing house for items that don’t quite align with the premium standards Amazon wishes to emphasize.
How the Government Fights Temu
Amazon wasn’t the only one to declare war against Temu: with the recent regulatory changes from the U.S. government, it will now be much more difficult for Chinese sellers to operate on the American market.
“Temu and Shein are building empires around the de minimis loophole in our import rules — dodging import taxes and evading scrutiny on the millions of goods they sell to Americans,” Rep. Mike Gallagher.
On September 13th, the Biden administration revised the “De Minimis” rule, which now requires Chinese sellers to pay tariffs and duties on all shipments, effectively eliminating their previous advantage of avoiding these costs by keeping shipments under $800.
Secondly, the U.S. has imposed stricter information collection, requiring Chinese sellers to provide a 10-digit tariff classification number for thorough customs checks, thereby reducing the potential for low-quality goods to enter the U.S. market.
Final Thoughts
The path to building a successful business on Amazon using the private label system is not just about buying low and selling high. Of course, the raw product from the supplier and its final cost to the customer differs significantly across both marketplaces, but it is you, your brand, and your effort that adds value to the product in the eyes of customers, as well as determine the price they are willing to pay for your product.
While Temu poses a serious threat to some sellers on Amazon, it has not become a competitor to Amazon’s strong points, such as brand recognition, customer trust, a wide range of products, and high customer retention, which keep Amazon competitive in the market up to this day.
Today, simply offering a lower price is not enough to take market share from Amazon. Certainly, some customers who want to buy at the lowest possible price and are willing to wait for weeks will start shopping on Temu, but the core customer base on Amazon consists of Prime members, who have shopped and will continue to shop on Amazon.
Become an Amazon Seller Today
In your pursuit of excellence and creating truly quality products, as a seller, you should not worry about the Temu marketplace. And in case you’re just starting out and want to create an unforgettable brand, but still don’t know where to begin – we can help you.
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Frequently asked questions
Why Are Temu's Prices Lower Than Amazon's?
Temu often has cheaper prices because many products come straight from manufacturers in China, skipping middlemen and reducing costs. Plus, Temu features smaller or lesser-known brands, which helps keep prices down.
On the flip side, Amazon offers a broad selection, including famous brands that usually have higher prices due to their quality and reputation.
Is Temu Better than Amazon?
While Temu is growing fast and attracting attention, it hasn’t overtaken Amazon yet. Amazon is a global leader with a huge customer base and a wide variety of products.
Temu focuses more on budget-friendly items and hasn’t reached Amazon’s scale. However, Temu is making a name for itself, especially among bargain hunters.
Is Temu Legit?
Yes, most products on Temu are genuine, and you can expect them to arrive at your doorstep in about 10 days. However, tech items like laptops, smartphones, and tablets are generally from lesser-known brands unless you see a blue checkmark on the listing.
Also, some customers have pointed out that the items they received sometimes look different from the images on the website or aren’t as high quality as expected, so it’s better to avoid ordering any tech devices from Temu.
Is It Safe to Buy From Temu?
Temu is not accredited by the Better Business Bureau (BBB) and holds an average rating of two-and-a-half stars. Recent complaints on the BBB website often mention that items either never arrived or took weeks, sometimes even months, to be delivered.
On the other hand, Temu has gained popularity on social media platforms, particularly TikTok, where many users express satisfaction with their purchases. From small gadgets and household items to clothing and shoes, Temu has become a trending topic.
While some products are inexpensively made, this is generally in line with their low prices, such as $1 or $3 items. Overall, the products on Temu typically meet customer expectations considering their cost.
Is Temu Better than Amazon?
Temu excels in offering low-cost products directly from Chinese manufacturers, which allows it to provide significantly cheaper prices than Amazon. This appeals to budget-conscious shoppers who are willing to wait longer for delivery.
However, Amazon maintains a strong advantage in terms of fast delivery, customer retention, and product quality. Amazon’s established brand recognition and customer trust, along with its wide range of products and high customer retention rates, keep it competitive despite Temu’s growing presence.
Therefore, whether Temu is better than Amazon depends on the shopper’s priorities — price versus speed and reliability.
How Long Does Temu Take to Ship?
Temu shipping time usually ranges from 4 to 22 days, depending on the shipping option you select. There are two choices available, each with varying timelines:
1. Standard shipping typically takes 6 to 22 days for delivery.
2. Express shipping usually delivers within 4 to 11 days.
After completing your purchase, you will receive a confirmation email from Temu with an estimated delivery date. Orders are usually processed within 1 to 3 days before being shipped. Once your shipment is on its way, Temu will provide tracking details via email so you can monitor its progress.
How to Return Temu Items?
Most items from Temu can be returned within 90 days for a full refund. But some exceptions apply.
» Items Not Eligible for Return
To maintain health and hygiene standards, certain products cannot be returned. These include groceries, personal care products, lingerie, and swimwear. Additionally, items that are custom-made or personalized are also excluded from return eligibility.
» Policy for Damaged or Defective Products
If an item arrives damaged, defective, or does not match the description, you can return it within 90 days of receipt. In such cases, Temu offers either a replacement or a full refund to resolve the issue.
