Temu has been one of the biggest things to hit the US e-commerce landscape over the past two years. However, the Chinese dollar store is caught in a nervous limbo, as it confronts potential trade changes under President Donald Trump. Therefore, it is ceding some control of its China-linked supply chain to move to a more flexible management style.
Why it matters: Temu’s supply chain is moving away from its direct-to-China model where Temu would originally handle everything to get Chinese products from factories to consumers in the US. Instead, the e-commerce retailer is switching to a more partially managed marketplace model that is focused on US-based fulfillment.
According to Sky Canaves, eMarketer principal analyst for retail and e-commerce, this change points to Temu’s ambitions to become a full-fledged marketplace that is not only known for cheap goods from China, but also offers a broader assortment to shoppers.
“Essentially, it wants to become more like Amazon,” Canaves told Retail Brew.
She added that Temu’s new “half custody” model will help it expand its product offering to US shoppers.
“If sellers can bring inventory to the US by ship, you open up a whole lot of other categories, including furniture, big sporting goods, things like exercise machines,” Canaves added. Temu can also start selling things like food and beverage products, health, and personal care items, Canaves said.
The platform’s popularity has been significant: 57% of US consumers have shopped at Temu, per eMarketer, which cited third-party sources. Owned by Chinese e-commerce major PDD Holdings, Temu launched in the US in September 2022.
It has been trying to lure US sellers to its platform and placing them front and center on its platform.
“The number [of US sellers] is going to be much smaller than the seller base in China,” Canaves pointed out. “However, the sales are now a significant share of Temu sales in the US.”
Temu is expected to hit $30 billion in US sales this year, according to eMarketer, as reported by Bloomberg.
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