Temu is turning into a global phenomenon of incredibly low prices. The company sells everything from clothes to home decor, car accessories, knee pads, and other practical items, and is now second in the ranking of e-commerce websites with the most traffic in the world, according to SimilarWeb. Right behind Amazon.

However, the Chinese platform, which in just two years has become a major competitor in the global market, is significantly different from Jeff Bezos’s company. How? It offers the lowest prices in the market for anything you can imagine. In Europe alone, to measure our claim, Temu gathered 93.7 million users in 2024, including 16.3 million in Germany, 12 million in France, 10 million in Italy, and 9.6 million in Poland.

The numbers don’t lie, proving that Temu has done what few believed was possible: surpassing Amazon, the long-standing gold standard for competitive prices. But how is it possible for a company that started by selling fresh fruit online to have reached the point of invading every mobile device and home around the world?

From Factory to Global Trend

Temu’s pricing policies are not revolutionary in China. The platform follows the business model of its parent company, Pinduoduo (or PDD Holdings). As the international arm of Pinduoduo, Temu represents China’s ambition to transition from being the world’s factory to becoming the world’s store. Essentially, it aims to be the app that we all use to make our purchases. Its low prices are not a temporary tactic but a fundamental pillar of its long-term strategy.

Temu was founded in Boston in September 2022 and is a subsidiary of the Chinese e-commerce giant Pinduoduo, which was founded in 2015. It was launched by Colin Huang in April of the same year and used WeChat’s group-buying model to sell bulk orders of fresh fruit. Its rapid growth led to the creation of Temu, which disrupted China’s e-commerce market, where JD.com and Alibaba had long reigned. Today, Temu operates in 79 countries, while Pinduoduo, including Temu, reported revenues of $34.879 billion and net profits of $8.267 billion. But what about the low prices?

It sounds like a dream to buy a set of t-shirts for 90 cents. But what could be behind this incredibly low cost? Critics of the company claim that Temu’s competitive pricing is based on unfair practices. Poor quality, aggressive marketing, deceptive commercial tactics, and dumping. The latter term means “selling at a loss.” In simple terms, the term refers to the practice of selling products below the normal market price or below production cost, with the goal of eliminating competition and securing a business’s dominance in a market. It sounds good for consumers, but in reality, it’s not.

Simply put, dumping means that companies operating in the same market cannot compete on the price and quality of these products, and sooner or later, the competition is wiped out. This way, the company gains control of a market, leading to a monopolistic situation that anyone can exploit over time.

Beyond that, at the heart of Temu’s pricing strategy is the Consumer-To-Manufacturer (C2M) model, introduced by Pinduoduo in March 2023. This approach uses reverse auctions, where Temu asks manufacturers to bid, forcing suppliers to compete by offering the lowest possible prices.

PDD Holdings sets the final product prices and profit margins, and manufacturers deliver the products directly to Pinduoduo’s warehouses in China, eliminating Temu’s need to buy or maintain inventory. Instead, manufacturers bear the storage costs and must take back any unsold products. Payments are typically made quarterly, further easing Temu’s financial burden, according to Henri Isaac, Senior Lecturer in Management Sciences at Paris-Dauphine University.

Social Media, the Most Powerful Tool

Temu, the fast-growing online marketplace, uses social media as a primary tool to attract new customers. Here’s how they do it:

1. Viral Marketing & Gamification
   Temu uses interactive games, giveaways, and referral programs to encourage users to share the platform with their friends. Features like “spin-to-win” discounts, “share to get free items,” and daily check-in rewards turn social media engagement into a fun, rewarding experience.
2. Influencer Marketing and Affiliate Marketing
   Temu collaborates with influencers and content creators on TikTok, Instagram, and YouTube to showcase products and offer discount codes. Many influencers post “Temu hauls,” showcasing affordable finds, making the platform appear fun and trendy.
3. User-Generated Content and Reviews
   By encouraging customers to post their purchases and experiences, Temu leverages authentic word-of-mouth marketing. Hashtags like #TemuHaul and #TemuFinds help create a community around their platform.
4. Targeted Ads & Algorithmic Promotion
   Temu invests heavily in paid advertising, using AI-based ad placements on Facebook, Instagram, and TikTok. Their ads often highlight low prices, limited-time offers, and free shipping deals to encourage impulse buying.
5. Trendjacking & Memes
   Temu jumps on trending topics, memes, and cultural moments to keep its brand relevant and relatable. They also use playful, casual language that resonates with younger audiences.

By combining these strategies, Temu quickly became one of the most talked-about e-commerce platforms on social media. In fact, their slogan, which seems to be more catchy than anything else in the online sphere, is “Shop Like a Billionaire.”

But I want to shop from Temu

Temu offers exceptionally low prices, often significantly cheaper than other online retailers, making it attractive to budget-conscious shoppers. The platform frequently runs promotions, free shipping offers, and referral rewards, allowing users to save even more money. Many customers find great deals on fashion items, home goods, electronics, and accessories. However, the quality of the products can often be poor, as many items come from third-party sellers in China. While some buyers are happy with their purchases, others report issues with size, material quality, or misleading product images.

Additionally, while Temu offers buyer protection and refunds for undelivered or defective items, the return process can be a hassle. Shipping times vary, with some orders arriving within a week and others taking much longer. There have also been significant concerns about data privacy and its processing due to Temu’s aggressive data collection practices and the working conditions of its suppliers. So, if you’re looking for cheap items and don’t mind potential inconsistencies in quality, labor conditions, and the environmental footprint of your purchases, Temu is a great choice.