- Temu, a Chinese e-commerce platform, is expanding to US and European sellers.
- The move offers advantages like shorter delivery times and reduced shipping cost exposure.
- Temu faces challenges in upgrading its image and navigating regulatory risks.
Chinese e-commerce platform Temu is set to open its marketplace to sellers in the US and Europe in the coming weeks.
Currently operating under a “managed marketplace” model, Temu has manufacturers consolidate their inventory in China and ship to consumers across borders, managing product listings, pricing, and shipping logistics.
This approach has resulted in longer shipping times but lower prices compared to competitors.
Advantages of expansion
Temu’s expansion into new markets will have US sellers handle fulfillment and logistics themselves, offering several advantages.
Shorter delivery times, the ability to list bulkier and higher-priced SKUs, and reduced exposure to long-haul shipping cost volatility are among the benefits. Industry experts expect Chinese sellers with US warehouse operations, many of whom also sell on Amazon, to be the first to utilize the new model.
Seller enthusiasm and challenges
American-grown brands are excited to join Temu, viewing it as an opportunity to diversify their sales channels and reach new customers.
However, Temu’s reputation for low prices and occasional product quality issues may deter some sellers from focusing on quality. Established US brands may be hesitant to join initially, and Temu faces the challenge of upgrading its image to attract different types of sellers and brands over time.
The expansion also benefits Temu by reducing its reliance on de minimis shipments, which have faced growing pressure from US lawmakers. With more sellers shipping domestically within the US, Temu could mitigate risks associated with potential changes to the de minimis policy.
As Temu continues to grow and compete with platforms like Amazon and Shein, its ability to attract diverse sellers and navigate regulatory challenges will be crucial to its success.
