New Chinese-Owned Fast Fashion App Draws Comparisons (Good And Bad) To Shein

Topline

You might have seen its Super Bowl ad or a Temu haul on TikTok as part of the aggressive marketing effort for the company that wants you to “shop like a billionaire,” resulting in millions of downloads—and mixed reactions from customers.

The Boston-based, Chinese-owned retailer is owned by PDD Holdings Inc. (Photo credit should read … [+] CFOTO/Future Publishing via Getty Images)

Future Publishing via Getty Images

Key Facts

Temu is an online retailer that launched in the United States in September, boasting shockingly low prices and an extensive catalog of items ranging from clothing to electronics to musical instruments.

The retailer’s key selling point is its cheap products: This weekend, the Temu website is prominently flaunting “President’s Day sales from $0.39” and sales “up to 90% off,” with selections including men’s running shoes for under $10 and a drill brush set for $6.

The Boston-based, Chinese-owned retailer is owned by PDD Holdings Inc., which also operates Temu’s sister company, Chinese e-commerce platform Pinduoduo.

The app has ranked No. 1 on Apple’s app store for much of 2023, helped by a Super Bowl commercial, which boasted how customers can “shop like a billionaire,” and celebrity endorsements from the likes of Jason Derulo and JuJu Smith-Schuster, as well as an ad campaign on Instagram, Facebook and Snapchat that TechCrunch compared to TikTok’s successful marketing approach.

Temu has enjoyed exposure on TikTok, too: The hashtag #temu has more than 300 million views and consists of plenty of “Temu hauls,” in which users take advantage of low prices to purchase and unbox items on camera.

Temu has also boosted its appeal and its social media profile through games that can earn customers credit toward goods as well as referral codes (many TikTok videos tagged #temu are flooded with commenters looking to earn discounts, asking “code for code?”).

Temu claims it keeps prices low by “cutting out the middleman” — it allows Chinese vendors to sell directly to American consumers and ships directly from China instead of a network of US warehouses, Wired reported.

But Temu has only a 1.8/5 star rating from 84 customer reviews on the Better Business Bureau website along with 120 complaints, many of which allege products never arrived, products were delivered with damages and customer service was slow or unhelpful.

Within just five months of release, the app has already been downloaded about 24 million times.

Key Background

Temu is capitalizing on the well-oiled machine of sister company Pinduoduo, which has been in business since 2015 and built the supply chain model Temu follows of cutting out intermediary costs, shipping directly from China. But Pinduoduo has had its own unhappy customers, too: Reports that counterfeit products had been sold through Pinduoduo sparked an investigation by Chinese regulators in 2018. In response, the company shut down more than 1,000 stores, took down more than 4 million product listings and blocked 450,000 suspected counterfeit goods from going up on its platform. In 2019, the U.S. Trade Representative’s Office placed Pinduoduo on its list of “notorious markets” for failing counterfeiting and piracy. The U.S. government has also cracked down on Chinese-owned apps in recent months, with some lawmakers pushing for a ban on TikTok and other Chinese-owned apps and businesses due to national security and data privacy concerns.

Crucial Quote

“Through the largest stage possible, we want to share with our consumers that they can shop with a sense of freedom because of the price we offer,” a Temu spokesperson told CNN about its “shop like a billionaire” motto.

Big Number

$10 million. That’s the total value of money and prizes Temu is giving away in its “Shake & Win” sweepstakes campaign designed to raise its profile. The huge prizes are a part of Temu’s big social media push: Sharing the sweepstakes on social media and referring friends and family members count as submissions.

Tangent

Temu’s low prices and wide range of products have drawn comparisons to Shein, a popular fast-fashion online retailer. “Temu and Shein are disrupting the boring U.S. e-commerce market more than anyone else,” Juozas Kaziukenas, founder of the e-commerce research firm Marketplace Pulse, told The Washington Post. Shein has become one of the world’s most popular and visible clothing brands, reaching $100 billion in sales in 2022 and appealing to consumers through cheap prices and influencer marketing. Shein, however, has been criticized for selling products made in workshops with unsafe working conditions, some of whom worked 17-hour days and were docked pay if garments had mistakes. Like many fast-fashion retailers, Shein has also faced criticism for its environmental impact; it’s pledged to reduce supply chain emissions by 25% by 2030. The quality of Shein’s clothing is notoriously poor (and can contain potentially dangerous chemicals, like lead), though consumers who purchase their clothes are likely looking to chase trends instead of buying sustainable, long-lasting clothing. The company has also come under fire multiple times for allegedly copying clothing designs created by independent artists and small businesses.