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American Bargain Hunters Flock To New Online Amazon Competitors From China

Temu, a marketplace with deep discounts and copious coupons, has become the most downloaded mobile app in the U.S. American Bargain Hunters Flock To New Online Amazon Competitors From China

As inflation and recession concerns squeeze American consumers, many are turning to a new mobile app with Chinese roots.

Online shopping site Temu has soared in popularity in the U.S. since its launch in September. The rapid growth of the site, which sells ultra-low-priced goods mostly made in China, has made Shanghai-based Pinduoduo Inc. the latest Chinese firm to find success in a country increasingly wary of Beijing as a technology rival.


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In less than four months, Temu has racked up 10.8 million installations in the U.S., according to analytics firm Sensor Tower, making it the country’s most downloaded mobile app in any category between Nov. 1 and Dec. 14.

When Kathy Benetti first went on Temu on Thanksgiving, she wasn’t planning to splurge. But as she browsed the site—pronounced “TEE-moo”—she was struck by the low prices. Before she knew it she had filled her shopping cart with 14 items totaling $90.

American Bargain Hunters Flock To New Online Amazon Competitors From China

A meat tenderizer cost 69 cents. A sweater went for $10, and a jacket that could be a Christmas gift for her son was $15. Ms. Benetti, a 68-year-old office manager at a storage facility in Dartmouth, Mass., said she was impressed that so many items were cheaper than on

Her order arrived within the promised 7-15 business days. “You’re not getting the top of the line, but that’s OK,” she said. Days later, she returned for Christmas shopping, this time spending $223 for 34 items.

Shoppers like Ms. Benetti helped Temu’s November sales volume roughly quadruple from October, peaking over the Black Friday shopping period, when daily sales reached $7 million over a seven-day period, according to research firm YipitData.

Though still small, Temu’s fast rise recalls that of Shein, another China-founded retailer that quickly emerged to become a juggernaut. Temu also follows ByteDance Ltd.’s short-video app TikTok, whose viral success and Chinese roots have made it a top target in Washington.

American Bargain Hunters Flock To New Online Amazon Competitors From China

Temu’s rapid growth stands in contrast to the dimming outlook faced by other retailers amid economic uncertainty. It is competing head-on not only with Shein, but entrenched giants like Inc.

Geopolitical tensions and pandemic-era logistical disruptions have spurred U.S. companies to lessen their reliance on China. Many have moved some production elsewhere.

Still, Temu’s growing popularity suggests the business model of selling inexpensive, made-in-China products to American consumers has potential.

Temu was launched by Pinduoduo, a disrupter on China’s internet. In seven years, Pinduoduo, which has started calling itself PDD Holdings, captured more than 70% of domestic internet users, prompting it to seek new markets as China’s economic and regulatory outlook grow murkier.

When Temu opened for business in September, its website made no mention of Pinduoduo. The site now acknowledges its Shanghai parent, though Temu says it started in Boston, sources products globally and runs its U.S. business through a Delaware-based company. A Singapore entity works with customers outside the U.S.

Temu pledges on its website to protect intellectual property rights, offset carbon emissions and encrypt consumer data. Shein and TikTok have come under scrutiny for some of those issues.

American Bargain Hunters Flock To New Online Amazon Competitors From China

Temu effectively reproduces Pinduoduo’s domestic Chinese business model, which focuses on consumers in less-affluent areas, encouraging them to band together and score deals.

Temu, like Pinduoduo, liberally doles out coupons and other incentives to consumers if they advertise Temu in their social networks.

Most Temu bestsellers cost less than $10 and are unbranded, though one hit product, a pair of Lenovo Group Ltd. wireless earbuds, lists for $8.47—40% less than on After applying coupons, consumers can get a pair for $3. Lenovo Audio’s product page indicates it has sold more than 100,000 pairs on Temu.

Yongchun Xin, a 50-year-old engineer in Poughkeepsie, N.Y., said he was first drawn by the Lenovo headphones, which a friend shared in a September group chat. An hour later, he had three pairs of headphones, a dozen cat toys and a potato masher in his shopping cart.

Over the next two months, Mr. Xin made two more orders on Temu. He now compares prices on Temu and before making a purchase. “Amazon is faster, but I don’t care about getting stuff in two days,” he said.

During the Christmas season, Temu says most customers received purchases within 11 days. The site offers a $5 credit if it takes longer than expected.

American Bargain Hunters Flock To New Online Amazon Competitors From China

Rui Ma, founder of consulting firm Tech Buzz China, says Temu is applying Pinduoduo’s business model of dangling a few bestsellers as loss leaders.

A Temu spokesman said the company is able to offer low prices by accessing Pinduoduo’s supply chains, generating savings that are passed along to consumers.

Temu offers tools that enable sellers to better manage production and inventory, thereby lowering costs, the spokesman said.

Unlike Shein, which sells its own branded apparel on its platform, Temu is a pure third-party marketplace. Shein, too, is considering adding a marketplace allowing third-party merchants to sell directly to customers, The Wall Street Journal has reported.

Pinduoduo doesn’t break out revenues for Temu. Liu Jun, Pinduoduo’s vice president of finance, said in a November analyst call that Temu’s impact on the parent company’s finances is small. Temu didn’t comment on whether it offers cash subsidies to sellers, nor how it will make money.

Ms. Benetti learned in early December that she could earn $10 for referring Temu to a friend. She plans to share a referral link with her sister and will consider ditching her Amazon Prime membership if she likes the items she ordered on Dec. 9.

“I think that’s the place I will be shopping from now on because it’s got everything,” she said.


Updated: 7-30-2023

China-Founded Rivals Shein And Temu Ramp Up War For American Shoppers

American Bargain Hunters Flock To New Online Amazon Competitors From China

The online sellers are fighting in U.S. courts, alleging dirty tricks as they duel for workers and suppliers back in China.

Shein and Temu, two of the fastest-growing shopping platforms in the U.S., have taken the gloves off in a globe-spanning fight that accentuates a strong reliance on China that both companies are trying to play down.

Fashion-retailer Shein, with its $5 pants and $9 dresses, seemed indomitable in its fast rise to become the top fast-fashion company in the U.S.

Then came Temu, an online marketplace backed by Chinese e-commerce firm PDD Holdings, which has soared in popularity since its U.S. launch in September.

The two companies have slapped lawsuits on each other in U.S. courts, alleging corporate dirty tricks, including bullying suppliers to pick sides and trademark infringement.

Less publicly, the dispute is playing out on the ground in China, where most of their supply chains and back offices are. The firms are fighting for suppliers and workers and are demanding long hours as part of a competition to get cheap goods to win over thrift shoppers in the U.S.—their biggest market.

American Bargain Hunters Flock To New Online Amazon Competitors From China

Both Shein and Temu have sought to distance themselves from China amid rising geopolitical tensions between Washington and Beijing, with some U.S. lawmakers pushing for a blanket ban on Chinese apps.

Shein, which doesn’t sell in China, has relocated its headquarters from the eastern Chinese city of Nanjing to Singapore. Temu says it is based in Boston and has removed from its website mentions of its links to Shanghai-based PDD.

In the most recent salvo, Temu’s antitrust lawsuit against Shein in federal court in Boston on July 14 alleges Shein forced Chinese clothing manufacturers into signing exclusive agreements with the online fashion retailer and threatened them with fines and penalties if they worked with Temu.

Temu also claimed that Shein sent fake notices of copyright infringement to disrupt Temu’s sales. Some garment makers have asked Temu to remove their products from the site “to appease Shein,” it added.

“We believe this lawsuit is without merit, and we will vigorously defend ourselves,” a Shein spokesperson said.

Exclusionary demands were once common practice among some Chinese e-commerce giants. In 2021, China’s antitrust regulator imposed a record fine of $2.8 billion against Alibaba and $533 million against food-delivery giant Meituan, alleging antitrust violations. Both companies said at the time they accepted the penalties “with sincerity.”

Shein, which made its debut in the U.S. in 2017, fired the first legal shot in December in federal court in Illinois, alleging that Temu had stolen Shein’s trademarks and copyrighted images and impersonated Shein on social media. Temu “strongly and categorically rejects all allegations,” a spokesperson said.

“These tit-for-tat lawsuits between Shein and Temu undermine both companies’ efforts to look less Chinese, when each already has a target on its back from Congress,” said Kevin Xu, a tech investor not invested in either company.

Shein, which sells to more than 150 countries, was recently valued at $66 billion and posted $23 billion in revenue last year. Since Temu came into view, Shein has consistently lost U.S. market share to its rival, data from Earnest Analytics shows.

Shein’s sales growth accelerated in the first half of 2023 from the second half of 2022, Executive Vice Chairman Donald Tang said in a letter he sent to investors Wednesday.

The letter, viewed by The Wall Street Journal, said Shein brought in the highest first-half income in the company’s history, compared with a near break-even in the first half of 2022.

Shein’s success is rooted in the agile supply chain it pioneered, placing orders in small quantities to test market appetite and replenishing orders as needed.

Recently, Shein has ventured beyond fashion and lifestyle, adopting a Temu-style marketplace model for big-ticket items and household products that are a staple of its rival.

Outside China, Shein has been on a hiring spree and building supply-chain and logistics infrastructure. The company has explored the possibility of hiring a leader for its U.S. operations, people familiar with the company said.

Founded in 2015, Nasdaq-listed PDD started in China by selling heavily discounted, generic household staples and quickly rose to rival Alibaba and It launched Temu in 25 markets in less than a year.

So far, Temu has focused on getting shoppers to swipe and buy. Its monthly user base in the U.S. is three times that of Shein, according to mobile-insights consulting firm GWS. Temu users spend 23 minutes a day on average on its app, longer than Shein users, at 15 minutes, GWS said.

Current and former Shein employees in China said Temu last year poached aggressively from Shein, especially those in supply-chain and operations positions.

PDD’s head count, which includes Temu and its Chinese sister platform, Pinduoduo, numbered 13,000 at the end of 2022. Shein has more than 11,000 workers.

On Chinese job-seeking site Maimai, users say Shein has offered financial incentives to pull longer hours and requires some employees to clock at least 242 hours a month.

PDD and Shein rank No. 2 and No. 5 on a chart measuring working hours for tech workers among Chinese consumer internet companies, at 64 hours and 58 hours each week, respectively. The chart was published by, which offers aggregated and anonymized compensation information about Chinese tech firms.

The companies are also fighting for suppliers throughout China that constantly compare profitability across platforms, including Alibaba’s AliExpress and TikTok, which is poised to launch an e-commerce business in the U.S.

Shein, which subcontracts with thousands of suppliers in China, is known for paying quickly. Temu dangled initiation incentives to attract sellers when it first launched.

Some suppliers said they later were turned off by Temu’s pricing practice, which they said was essentially a bidding process that pits suppliers against each other and left them with razor-thin profit margins.

A watchmaker in Yiwu, a major manufacturing hub in eastern China’s Zhejiang province, said she previously prioritized selling on Shein but after sales fell 30% on the app she is considering refocusing on Temu. Some sellers in Yiwu have made the switch, she said.

“The delivery trucks around here are filled with Temu products these days,” she said.



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