Remember this year’s Super Bowl ads?
While most ads were for brands that consumers already know and buy, there were FIVE 30-second ads (at a cost of roughly $7 million per 30 seconds, plus another $15 million in coupons and giveaways) from a somewhat new-to-America Chinese company named Temu which promises prices so low that customers can “shop like a billionaire.”
The Super Bowl ads seem to have paid off already as Temu’s app rose to second place among the most downloaded free apps on Apple devices. But what is Temu and why should we care about it?
Basically, Temu is an online discount marketplace that sells low-priced items ranging from clothes, to home products, to technology products. In addition, customers earn store credit for promoting it on social media, or playing games hosted on its website.
A big difference (besides the low prices) is that shipping can take 23 days since products come from outside the U.S. Another problem is the level of customer complaints, possible unfair/unethical labor practices, as well as data privacy concerns about the information it collects. Part of the company’s success is also based on its use of a loophole in import laws which allows it to skip import taxes based on the low price of individual items, not bulk shipment.
Temu is actually the U.S. version of a giant e-commerce Chinese company called Pinduoduo (now renamed PDD Holdings, Inc.) and sells to more than 750 million users/month. Temu launched in the U.S. in fall of 2022 and now has more than 50 million active users, up 300% year-over-year.
Will shop on Temu?
Group Activities and Discussion Questions:
- Poll students: Who has used Temu? What do they know about it?
- Show video about Temu: https://youtu.be/LYU7QEGsBtE?si=Ij7UuDjar4RKUxhs
- Show Temu website: https://www.temu.com/
- Divide students into teams and have each team compare prices on Temu versus prices on Amazon or at other ecommerce retailers.
- What are the main differences?
- Have students prepare a positioning map for Temu versus its competitors. What are the risks?
- OPTIONAL: Either the professor or students can place an order on Temu to observe the handling and product quality for themselves. A caveat: Be very aware of data that may be collected by the company before deciding to go ahead with buying.
